Derek purchases a small business from arton september 1, Ask an Expert

Accounting

Derek purchases a small business from Arton September 1, 2008. 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 2008 tax return as Section 197 intangible amortization?

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Accounting Basics, Accounting

Category:- Accounting Basics
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