After several profitable years running her business, Ingrid decided to acquire the assets of a small competing business.On May 1 of year 1, Ingrid acquired the competing business for $354,000. Ingrid allocated $59,000 of the purchase priceto goodwill. Ingrid's business reports its taxable income on a calendar-year basis.Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.a. How much amortization expense on the goodwill can Ingrid deduct in year 1, year 2, and year 3?Year 1Deductible AmortizationExpenseYear 2Year 3

Step 1:Amortization is the decrease in the value of fixed intangible assets. As the assets are…

Answered: After several profitable years running…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 32P

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After several profitable years running her business, Ingrid decided to acquire the assets of a small competing business. On May 1 of year 1, Ingrid acquired the competing business for $360,000. Ingrid allocated $60,000 of the purchase price to goodwill. Ingrid’s business reports its taxable income on a calendar-year basis. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) a. How much amortization expense on the goodwill can Ingrid deduct in year 1, year 2, and year 3? Deductible Amortization Expense Year 1 Year 2 Year 3 b. In lieu of the original facts, assume that Ingrid purchased only a phone list with a useful life of five years for $15,000. How much amortization expense on the phone list can Ingrid deduct in year 1, year 2, and year 3? Phone List Year 1 Amortization Expense Year 2 Amortization Expense Year 3 Amortization Expense
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