On January 1, 2016, Ted Purchased a Small Software Company

question 28

Multiple Choice

On January 1, 2016, Ted purchased a small software company for $200,000. He paid $120,000 for the fixed assets of the company and $80,000 for goodwill. How much amortization may Ted deduct on his 2016 tax return for the purchased goodwill?

• A)$0
• B)$5,333
• C)$5,750
• D)$6,000
• E)$90,000

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Definitions:

Mid-Ocean Ridge

A submerged chain of mountains created by the movements of tectonic plates, where volcanic processes generate new sea floor.

Magnetic Stripes

Patterns of magnetic anomalies found on the ocean floor, parallel to mid-ocean ridges, that record reversals of the Earth's magnetic field.

Triple Junction

The place where three tectonic plates, and three plate-tectonic boundaries, meet.

Plate Boundaries

The edges where two tectonic plates meet, which can be sites of significant geological activity like earthquakes and volcanic eruptions.