Paulman Incurred $68,000 of Research and Experimental Expenses and Began

question 122

Essay

Paulman incurred $68,000 of research and experimental expenses and began amortizing them over 60 months during June of Year 1. During May of Year 3, Paulman received a patent based upon the research being amortized. $49,000 of legal expenses for the patent were incurred. The patent is expected to have a remaining useful life of 17 years.
1) What is the basis of the patent? (Round amortization for each year to the nearest whole number.)
2) What is the amortization deduction with respect to the patent during the year it was issued? (Round final answer to the nearest whole number.)

---

Definitions:

Bilateral Contract

An agreement containing mutual promises, in which each party commits to performing acts or refraining from actions.

Express Contract

A type of contract where the terms are explicitly stated and agreed upon by the parties, either orally or in writing.

Cross-licensing

Cross-licensing is an agreement between two or more parties where each party grants rights to their intellectual property or technology to the other parties involved.

Patent Holders

Patent holders are individuals or entities possessing the legal rights to an invention, granted by a patent office, allowing them to exclude others from making, using, or selling the invention.