On April 18, 2021, Petros buys all the assets of Brigid's Muffler Shop. Included in the purchase price of $295,000 is a payment of $20,000 to Brigid not to open a competing shop in the state for a period of 5 years. Brigid's assets at the date of sale are as follows:

The patent is on a special muffler that Brigid developed and patented 5 years ago. Petros would like to know the maximum amount of the deduction he will be allowed on the purchase of Brigid's assets for 2021.

Transcribed Image Text:

Asset Inventory Equipment Building Patent Land Adjusted basis $8.500 3,500 80,000 500 5,000 Fair Market Value $10,000 30,000 120,000 15.000 10,000