will 47,720 nant not to compete 59,650 $345,970 v much of the $345,970 purchase price is for Section 197 intangible assets? t amount can Derek deduct on his 2020 tax return as Section 197 intangible an ired, round the final answer to the nearest dollar. Use months, not day

will 47,720 nant not to compete 59,650 $345,970 v much of the $345,970 purchase price is for Section 197 intangible assets? t amount can Derek deduct on his 2020 tax return as Section 197 intangible an ired, round the final answer to the nearest dollar. Use months, not day

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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Question

Derek purchases a small business from Art on September 1, 2020. He paid the following amounts for the business:
Fixed assets
$238,600
Goodwill
47,720
Covenant not to compete
59,650
Total
$345,970
a. How much of the $345,970 purchase price is for Section 197 intangible assets?
$4
b. What amount can Derek deduct on his 2020 tax return as Section 197 intangible amortization?
If required, round the final answer to the nearest dollar. Use months, not days, in your computations.
$

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