Scott Purchases a Small Business from Lew on July 1,2013

question 45

Essay

Scott purchases a small business from Lew on July 1,2013.He paid the following amounts for the business:
$\begin{array}{lc}\text { Land } & \$ 100,000 \\\text { Commercial building } & 200,000 \\\text { Furniture and equipment } & \$ 0,000 \\\text { Going-concern value } & 50,000 \\\text { Workforce in place } & 25,000\\\text { Total }&\$455,000\end{array}$ $\begin{array}{lc}\text { Land } & \$ 100,000 \\\text { Commercial building } & 200,000 \\\text { Furniture and equipment } & 80,000 \\\text { Going-concern value } & 50,000 \\\text { Workforce in place } & 25,000\\\text { Total }&\$455,000\end{array}$
a.How much of the $455,000 purchase price is for Section 197 intangible assets?
b.What amount can Scott deduct on his 2013 tax return as Section 197 intangible amortization?

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Definitions:

Cognitive Dissonance Theory

A theory which suggests that we experience discomfort or dissonance when our beliefs, values, or behaviors are in conflict, leading us to change one to reduce the dissonance.

Introductory Psychology

The branch of psychology that is designed as an entry point for students, covering fundamental concepts, theories, and research methods in psychology.

Prerequisite

A requirement that must be fulfilled before a certain action can be taken or a more advanced stage can be reached.

Peripheral Route

A persuasive strategy that relies on superficial cues rather than substantive arguments to influence someone's attitude or behavior.