Derek purchases a small business from Art on September 1, 2014. He paid the following amounts for
Question:
Derek purchases a small business from Art on September 1, 2014. He paid the following amounts for the business:
Fixed assets……………………………… $220,000
Goodwill…………………………………. 40,000
Covenant not to compete………………… 45,000
Total……………………………………… $305,000
a. How much of the $305,000 purchase price is for Section 197 intangible assets?
$ _______________
b. What amount can Derek deduct on his 2014 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...
Step by Step Answer:
a 85000 40000 4...View the full answer
Income Tax Fundamentals 2015
ISBN: 9781305177772
33rd Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven Gill
