On May 5 of the current tax year, Byrne purchased a patent that qualifies as a § 197 intangible.The cost of the patent was $207,000 and Byrne is a calendar year taxpayer.In the current tax year, how much of the patent's cost may Byrne amortize?

Question

Quizplus · Accepted Answer

Section 197 intangibles are amortized over 15 years (180 months) on a straight-line basis. The annual amortization is $207,000 / 15 = $13,800. Since Byrne purchased the patent on May 5, he can amortize it for 8 months in the current year: ($13,800 / 12) * 8 = $9,200.

On May 5 of the Current Tax Year, Byrne Purchased