Which of the Following Statements Concerning Business Goodwill Is False

question 39

Multiple Choice

Which of the following statements concerning business goodwill is false?

• A) If a business creates goodwill by developing a loyal customer base and generating brand name recognition, the tax basis in the goodwill is zero.
• B) When a taxpayer purchases a business and capitalizes the cost allocated to goodwill, the cost basis is not amortized for financial reporting purposes.
• C) When a taxpayer purchases a business and capitalizes the cost allocated to goodwill, the cost basis may be amortized over 15 years for tax purposes.
• D) The tax deduction for goodwill amortization is an unfavorable book/tax difference.

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Definitions:

Active Listening

A communication technique involving fully concentrating, understanding, responding and then remembering what is being said.

Speaker

The person who delivers an oral presentation or speech to an audience.

Critical Listening

Critical listening involves evaluating the arguments or points being made by a speaker and assessing their validity, logic, and persuasiveness.

Evidence Strength

Refers to the robustness or persuasiveness of evidence provided to support arguments or hypotheses in various contexts.