Devon purchased a small business from Art on August 30, 2023, and paid the following amounts for the business: Line Item Description Amount Fixed assets $303,400 Goodwill 60,680 Covenant not to compete 75,850 Total $439,930 b. What amount can Devon deduct on his 2023 tax return as Section 197 intangible amortization? If required, round the final answer to the nearest dollar. Use months, not days, in your computations.

Devon purchased a small business from Art on August 30, 2023, and paid the following amounts for the business: Line Item Description Amount Fixed assets $303,400 Goodwill 60,680 Covenant not to compete 75,850 Total $439,930 b. What amount can Devon deduct on his 2023 tax return as Section 197 intangible amortization? If required, round the final answer to the nearest dollar. Use months, not days, in your computations.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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b. What amount can Devon deduct on his 2023 tax return as Section 197 intangible amortization?

If required, round the final answer to the nearest dollar. Use months, not days, in your computations.

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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