Derek purchases a small business from Art on September 1, 2018. He paid the following amounts for the business:

Fixed assets	$258,400
Goodwill	51,680
Covenant not to compete	64,600
Total	$374,680

a.  How much of the $374,680 purchase price is for Section 197 intangible assets?    116280

b. What amount can Derek deduct on his 2018 tax return as Section 197 intangible amortization?

If required, round the final answer to the nearest dollar. Use months, not days, in your computations.

Answer rating: 100% (QA)

Answer a As per section 197 both Goodwill and covenant not to comp... View the full answer