Company P purchased an 80% interest in Company S on January 1, 2016, for $800,000.On the purchase date, Company S stockholders' equity was $800,000.Any excess of fair value over book value was attributed to a patent with a 10-year remaining life.In 2016, Company P reported internally generated net income before taxes of $150,000.Company S reported a net income before taxes of $70,000.The firms file a consolidated tax return at a 30% tax rate.The nondeductible portion of excess amortization is

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The excess of fair value over book value is attributed to a patent, which is amortized over its remaining life. Since the patent has a 10-year remaining life, the annual amortization expense is the excess amount divided by 10 years. However, the question does not specify the excess amount directly, but we can infer that there is an excess because the purchase was for the full equity value and an adjustment for a patent is mentioned. The nondeductible portion would be related to the portion of the patent's amortization that is attributable to the minority interest (20% not owned by Company P). However, without the specific excess amount, we cannot calculate the exact amortization or the nondeductible portion directly from the information given. The correct answer is inferred to be related to the specifics of tax treatment and amortization of intangible assets, but with the information provided, the most accurate answer cannot be directly calculated, leading to a misunderstanding in the question's setup. Given the options and the typical treatment of such transactions, the assumption might be that all amortization is deductible, but the question's phrasing suggests looking for a nondeductible portion, which implies some portion might not be deductible under certain tax rules. However, without explicit numbers on the excess value attributed to the patent, the direct calculation is not provided, leading to confusion.

Company P Purchased an 80% Interest in Company S on January