On January 1, 2016, 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 2016 tax return for the purchased goodwill?

Question

Quizplus · Accepted Answer

Goodwill is amortized over 15 years for tax purposes. The annual amortization deduction is $80,000 / 15 = $5,333.33, rounded to $5,333.

On January 1, 2016, Ted Purchased a Small Software Company