On December 1, 2014, Lavender Manufacturing Company (a corporation) purchased another company's assets, including a patent. The

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On December 1, 2014, Lavender Manufacturing Company (a corporation) purchased another company's assets, including a patent. The patent was used in Lavender's manufacturing operations; $49,500 was allocated to the patent, and it was amortized at the rate of $275 per month. On July 30, 2016, Lavender sold the patent for $95,000. Twenty months of amortization had been taken on the patent. What are the amount and nature of the gain Lavender recognizes on the disposition of the patent? Write a letter to Lavender, discussing the treatment of the gain. Lavender's address is 6734 Grover Street, Boothbay Harbor, ME 04538. The letter should be addressed to Bill Cubit, Controller.
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South Western Federal Taxation Individual Income Taxes 2017

ISBN: 9781305873988

40th Edition

Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young, Nellen

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