On January 1,2011,Ted purchased a small software company for $155,000.He paid $95,000 for the fixed assets of the company and $60,000 for goodwill.How much amortization may Ted deduct on his 2011 tax return for the purchased goodwill?

Question

Quizplus · Accepted Answer

Goodwill is amortized over 15 years for tax purposes. Therefore, the annual amortization deduction for the $60,000 goodwill is $60,000 / 15 = $4,000.

On January 1,2011,Ted Purchased a Small Software Company for $155,000