Derek purchases a small business from Art on July 1, 2016. He paid the following amounts for
Question:
Derek purchases a small business from Art on July 1, 2016. He paid the following amounts for the business:
Fixed assets ....................................... $220,000
Goodwill ................................................. 50,000
Covenant not to compete .................... 55,000
Total .................................................... $325,000
a. How much of the $315,000 purchase price is for Section 197 intangible assets?
b. What amount can Derek deduct on his 2016 tax return as Section 197 intangible amortization?
Intangible AssetsAn intangible asset is a resource controlled by an entity without physical substance. Unlike other assets, an intangible asset has no physical existence and you cannot touch it.Types of Intangible Assets and ExamplesSome examples are patented...
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Muhammad Salman Alvi
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Related Book For 
Income Tax Fundamentals 2017
ISBN: 9781305872738
35th Edition
Authors: Gerald E. Whittenburg, Steven Gill, Martha Altus Buller
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