Goodwill is the part of a business's sale price that exceeds the value of its identifiable assets, representing reputation, customer relationships and other intangible value that comes with the business. In an asset sale, goodwill is allocated as its own line on Form 8594 and gets amortized by the buyer for tax purposes over a set number of years.
Why it matters
How much of your price gets allocated to goodwill versus hard assets affects the tax rate you pay on that part of the sale.
General information, not legal or tax advice.