Derek purchases a small business from Art on June 30, 2020. He paid the following amounts for

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Derek purchases a small business from Art on June 30, 2020. He paid the following amounts for the business:

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

a. How much of the $250,000 purchase price is for Section 197 intangible assets?
$___________________
b. What amount can Derek deduct on his 2020 tax return as Section 197 intangible amortization?
$___________________

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Income Tax Fundamentals 2021

ISBN: 9780357141366

39th Edition

Authors: Gerald E. Whittenburg, Martha Altus-Buller, Steven Gill

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Question Posted: Sep 28, 2023 03:05 AM

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Derek purchases a small business from Art on June 30, 2020. He paid the following amounts for

Question:

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

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Income Tax Fundamentals 2021

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