Derek purchases a small business from Art on June 30, 2019. he paid the following amounts for business: Fixed assets: $180,000 Goodwill: $40,000 Covenant not to complete $30,000 Total: $250,000 a. How much of the $250,000 purchases price is for Section 197 intangible assets? b. What amount can Derek deduct on his 2019 tax return as Section 197 intangible amortization?
Derek purchases a small business from Art on June 30, 2019. he paid the following amounts for business: Fixed assets: $180,000 Goodwill: $40,000 Covenant not to complete $30,000 Total: $250,000 a. How much of the $250,000 purchases price is for Section 197 intangible assets? b. What amount can Derek deduct on his 2019 tax return as Section 197 intangible amortization?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Derek purchases a small business from Art on June 30, 2019. he paid the following amounts for business:
Fixed assets: $180,000
Covenant not to complete $30,000
Total: $250,000
a. How much of the $250,000 purchases price is for Section 197 intangible assets?
b. What amount can Derek deduct on his 2019 tax return as Section 197 intangible amortization?
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