Derek purchases a small business from Art on August 30, 2022. He paid the following amounts for

Question:

Derek purchases a small business from Art on August 30, 2022. He paid the following amounts for the business:

a. How much of the $240,000 purchase price is for Section 197 intangible assets?

b. What amount can Derek deduct on his 2022 tax return as Section 197 intangible amortization?

Section 197 intangibles

The category of intangibles that consists of those acquired by a taxpayer as part of the acquisition of a trade or business. They are amortized over a 15-year period, beginning with the month of acquisition.

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Income Tax Fundamentals 2023

ISBN: 9780357719527

41st Edition

Authors: Gerald E. Whittenburg, Steven Gill

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Question Posted: Feb 28, 2023 06:56 AM

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Derek purchases a small business from Art on August 30, 2022. He paid the following amounts for

Question:

Fixed assets Goodwill Covenant not to compete Total $170,000 50,000 20,000 $240,000

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Income Tax Fundamentals 2023

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