Derek purchased a small business from Art on August 30, 2022. He paid the following amounts for the business: Fixed assets    $170,000 Goodwill    50,000 Covenant not to compete    20,000 Total    $240,000 What amount can Derek deduct on his 2022 tax return as Section 197 intangible amortization? Use months, not days, in your computations. Round your answer to the nearest dollar. Can someone explain me this step by step. Im stuck here.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Derek purchased a small business from Art on August 30, 2022. He paid the following amounts for the business:

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

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

Use months, not days, in your computations. Round your answer to the nearest dollar.
Can someone explain me this step by step. Im stuck here. 

 

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