Choose the correct. How does the amortization of tax-deductible goodwill affect the computation of a parent company’s income taxes?a. It is a deductible expense only if the parent owns at least 80 percent of subsidiary’s voting stock.b. It is deductible only as impairments are recognized.c. It is a deductible item over a 15-year period.d. It is deductible only if a consolidated tax return is filed.

Choose the correct. How does the amortization of tax-deductible goodwill affect the computation of a parent company’s income taxes?a. It is a deductible expense only if the parent owns at least 80 percent of subsidiary’s voting stock.b. It is deductible only as impairments are recognized.c. It is a deductible item over a 15-year period.d. It is deductible only if a consolidated tax return is filed.

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

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter7: Losses—deductions And Limitations

Section: Chapter Questions

Problem 14DQ

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Question

Choose the correct. How does the amortization of tax-deductible goodwill affect the computation of a parent company’s income taxes?
a. It is a deductible expense only if the parent owns at least 80 percent of subsidiary’s voting stock.
b. It is deductible only as impairments are recognized.
c. It is a deductible item over a 15-year period.
d. It is deductible only if a consolidated tax return is filed.

Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).

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