# What percentage of a dental practice sale is goodwill? Goodwill typically represents 75% to 90% of a dental practice’s purchase price in an asset sale, according to Minty Dental, but the IRS sets no dental percentage. Under the residual method, goodwill is whatever is left after the price is assigned to the other asset classes at fair market value ([deal sourcing](https://ddsintel.com/deal-sourcing)). By DDSIntel Editorial Team. Source: DDSIntel, https://ddsintel.com/deal-sourcing/dental-practice-goodwill-percentage. Published 2026-10-28; data as of 2026-10-27. ## Key numbers - **75%** percent of purchase price, the low end of the goodwill share one publisher reports for dental asset sales (Minty Dental, 2026; https://mintydental.com/blog/goodwill-allocation-dental-practice-purchase-tax-impact-buyer) - **90%** percent of purchase price, the high end of that range (Minty Dental, 2026; https://mintydental.com/blog/goodwill-allocation-dental-practice-purchase-tax-impact-buyer) - **7** asset classes on IRS Form 8594; goodwill is Class VII (IRS, Instructions for Form 8594, 2026; https://www.irs.gov/instructions/i8594) - **15** years, the period over which a buyer amortizes purchased goodwill (Internal Revenue Service, Instructions for Form 4562, 2026; https://www.irs.gov/instructions/i4562) ## What is goodwill in a dental practice sale? [Goodwill](https://ddsintel.com/glossary/goodwill) is the intangible value of the going practice: patient relationships, reputation, systems and the expectation that patients keep coming. In an [asset purchase](https://ddsintel.com/glossary/asset-purchase) it is usually the largest single component of the price, recorded after equipment, supplies and other identifiable assets are valued at fair market value. Goodwill is not the [EBITDA multiple](https://ddsintel.com/glossary/ebitda-multiple). The multiple sets the price; the allocation splits an agreed price into tax categories. Price comes first, from [how dental practices are valued](https://ddsintel.com/deal-sourcing/how-dental-practices-are-valued). ## Does the IRS set a goodwill percentage for dental practices? No. The IRS instructions for Form 8594 use the residual method: the price is allocated through Classes I to VI at fair market value, and the remainder goes to Class VII, goodwill and going concern value. Nothing in the instructions sets a percentage for dentistry or any other profession, so any quoted share is market observation. How the form is filed, by whom and when is covered in [IRS Form 8594 in a dental practice sale](https://ddsintel.com/for/dental-practice-sale-tax-form-8594). If someone says the IRS requires a fixed goodwill share, ask for the appraisal behind it. ## Why is goodwill such a large share of a dental practice sale? A dental practice is a people-and-patient business. Equipment matters, but most of what a buyer pays for is the patient base and the expectation that it transfers. Minty Dental reports 75% to 90% as typical and cites a healthcare advisory team at 60% to 80%. Treat both as observations, not rules. Owned real estate (often sold separately), recently purchased imaging and specialty equipment raise the tangible share and lower the goodwill residual. Transferability, not the percentage itself, is what buyers test in a [quality of earnings review](https://ddsintel.com/deal-sourcing/quality-of-earnings-review). ## Why do buyers and sellers disagree about goodwill allocation? Sellers often prefer more goodwill, because gain on goodwill can qualify for capital gains rates, while gain on equipment can be taxed partly as ordinary income. Buyers often prefer more equipment, which depreciates faster, because purchased goodwill is amortized over 15 years. Both parties report the allocation, so they should agree one schedule. The 15-year period comes from the IRS instructions for Form 4562, which list goodwill among section 197 intangibles that must be amortized over 180 months. Entity type, personal versus practice goodwill and state taxes change the answer; that is CPA and counsel work. ## When should the goodwill allocation be agreed? Agree the allocation in the definitive purchase agreement, as a schedule both CPAs have modeled, not as a rough figure in the letter of intent. Equipment appraisals and diligence findings feed the fair market values in the earlier classes, so the goodwill residual can move until the agreement is final. Structure also matters. Cash at close, [earn-outs and holdbacks](https://ddsintel.com/deal-sourcing/earn-outs-and-holdbacks) and rollover equity change timing and reporting; see [how much cash at close to expect in a DSO offer](https://ddsintel.com/dso/dso-offer-cash-at-close). Price context is on [practice valuation multiples](https://ddsintel.com/data/practice-valuation-multiples), and aggregate [transition signals](https://ddsintel.com/signals) show where sales are forming. ## Frequently asked questions ### Is there an official IRS goodwill percentage for dental practices? No. Form 8594 uses the residual method, so goodwill is what remains after the other asset classes are valued. ### What goodwill share do advisers quote? Minty Dental reports 75% to 90% as typical for dental asset sales and cites another adviser at 60% to 80%. Actual shares depend on the assets in the deal. ### How long does a buyer amortize purchased goodwill? Fifteen years (180 months), per the IRS instructions for Form 4562. ### Does a stock sale use the same allocation? No. A stock purchase has a different tax and liability profile; see [asset versus stock purchase](https://ddsintel.com/deal-sourcing/asset-vs-stock-purchase). ### Is this tax advice? No. It is general information from IRS and published sources. Have your CPA and attorney review any allocation. ## Sources 1. Minty Dental. Goodwill allocation in a dental practice purchase: tax impact for the buyer. https://mintydental.com/blog/goodwill-allocation-dental-practice-purchase-tax-impact-buyer 2. Internal Revenue Service. Instructions for Form 8594 (Asset Acquisition Statement). https://www.irs.gov/instructions/i8594 3. Internal Revenue Service. Instructions for Form 4562 (Depreciation and Amortization), Part VI. https://www.irs.gov/instructions/i4562 --- DDSIntel is a dental transition intelligence platform that detects pre-market dental practice transition signals for brokers, DSOs, lenders and the firms that serve them.