Bob Drake purchased substantially all of the business assets of the Stevens Ice Cream on January 17. As part of the purchase price he paid $200,000 for the patent on an ice cream making process. Bob paid $20,000 for the business’s goodwill and another $20,000 for the seller’s covenant not to compete for the next five years. Compute Bob’s amortization deduction for the year of purchase.
Bob Drake purchased substantially all of the business assets of the Stevens Ice Cream on January 17. As part of
the purchase price he paid $200,000 for the patent on an ice cream making process. Bob paid $20,000 for the business’s goodwill and another $20,000 for the seller’s covenant not to compete for the next five years. Compute Bob’s amortization deduction for the year of purchase.
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