Problem 8-15 Intangibles (LO 8.6) Annie develops a successful tax practice. She sells the practice to her friend Carol for $54,000 and moves to Florida to retire. The tax practice has no assets except intangible benefits such as the goodwill and going-concern value Annie has developed over the years. How should Carol treat the $54,000 cost of the tax practice she has purchased? Because the purchased goodwill and going-concern value qualify as a section 197 intangible assets, the $54,000 is currently expensed .
Problem 8-15 Intangibles (LO 8.6) Annie develops a successful tax practice. She sells the practice to her friend Carol for $54,000 and moves to Florida to retire. The tax practice has no assets except intangible benefits such as the goodwill and going-concern value Annie has developed over the years. How should Carol treat the $54,000 cost of the tax practice she has purchased? Because the purchased goodwill and going-concern value qualify as a section 197 intangible assets, the $54,000 is currently expensed .
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 8-15
Intangibles (LO 8.6)
Annie develops a successful tax practice. She sells the practice to her friend Carol for $54,000 and moves to Florida to retire. The tax practice has no assets except intangible benefits such as the goodwill and going-concern value Annie has developed over the years.
How should Carol treat the $54,000 cost of the tax practice she has purchased?
Because the purchased goodwill and going-concern value
qualify
as a section 197 intangible assets, the $54,000 is
currently expensed
.
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