Problem 8-16 Intangibles (LO 8.6) Derek purchases a small business from Art on August 30, 2022. He paid the following amounts for the business: Fixed assets Goodwill Covenant not to compete Total a. How much of the $240,000 purchase price is for Section 197 intangible assets? 70,000 Feedback Check My Work $170,000 50,000 20,000 $240,000 b. 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. 2,333 X
Problem 8-16 Intangibles (LO 8.6) Derek purchases a small business from Art on August 30, 2022. He paid the following amounts for the business: Fixed assets Goodwill Covenant not to compete Total a. How much of the $240,000 purchase price is for Section 197 intangible assets? 70,000 Feedback Check My Work $170,000 50,000 20,000 $240,000 b. 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. 2,333 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 8-16
Intangibles (LO 8.6)
Derek purchases a small business from Art on August 30, 2022. He paid the following amounts for the business:
Fixed assets
Goodwill
Covenant not to compete
Total
a. How much of the $240,000 purchase price is for Section 197 intangible assets?
70,000
Feedback
Check My Work
$170,000
50,000
20,000
$240,000
b. 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.
2,333 X
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