On January 1, 2019, Ted purchased a small software company for $200,000. He paid $120,000 for the fixed assets of the company and $80,000 for goodwill. How much amortization may Ted deduct on his 2019 tax return for the purchased goodwill?

Question

Quizplus · Accepted Answer

Goodwill is amortized (deducted) over 15 years for tax purposes. Therefore, the annual amortization deduction for the $80,000 of purchased goodwill is $80,000 / 15 = $5,333.

On January 1, 2019, Ted Purchased a Small Software Company