Cost Recovery

Question 1

Section 197 intangibles

Answer 1

• Trademark, franchise, trade name
• Goodwill
• Workforce in place
• Business bks & records, operating system or any other information base
• Patent, copyright, formula, process, design, etc
• Customer based intangible (market share)
• Supplier based intangible
• License, permit, government right
• Do not compete covenant

Always amortized over 15 yrs (180 months) and only for the months actually placed in service

Question 2

Section 179

Answer 2

2021 limitation = $1,050,000

Question 3

Section 280F(a) - Luxury automobile depr limitation (280F limitation)

Answer 3

Maximum allowable depreciation is as follows:
Yr 1 - 18,200 (10,200+8,000)
Yr 2 - 16,400
Yr 3 - 9,800
Yr 4&5 - 5,860

(falls under 168k)