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Problem 8-14 Intangibles (LO 8.6) Derek purchases a small business from Art on June 30,...

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Problem 8-14 Intangibles (LO 8.6) Derek purchases a small business from Art on June 30, 2020. He paid the following amounts for the business: Fixed assets Goodwill Covenant not to compete $180,000 40,000 30,000 $250,000 Total a. How much of the $250,000 purchase price is for Section 197 intangible assets? 70,000 Feedback Check My Work The current tax guidance provides for two main categories of intangibles: (1) Section 197 intangibles and (2) non-Section 197 intangi Section 197 intangibles are those acquired by a taxpayer as part of the acquisition of a trade or business. Amortization is a cost recov method similar to depreciation in that it spreads the cost recovery of certain intangibles over a fixed period of years. b. What amount can Derek deduct on his 2020 tax return as Section 197 intangible amortization? Use months, not days, in your computations. Round your answer to the nearest dollar. 152,730 X

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