How much of the $250,000 purchase price is for Section 197 intangible assets? $70000 b. What amount can Derek deduct on his 2019 tax return as Section 197 intangible amortization?

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Derek purchases a small business from Art on June 30, 2019. He paid the following amounts for the business:

Fixed assets $180,000
Goodwill 40,000
Covenant not to compete 30,000
Total $250,000

a.  How much of the $250,000 purchase price is for Section 197 intangible assets? $70000

b. What amount can Derek deduct on his 2019 tax return as Section 197 intangible amortization?

Use months, not days, in your computations. Round your answer to the nearest dollar.

 

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