Amortize as Sec 197 intangible over 15 yrs - IF software not available to general public AND acquired in connection with purchase of business?? Would this include software developed FOR your business (but not in connection with PURCHASE of business)? Harlan?
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Off the shelf software and other software ineligible for Section 197 treatment is depreciated using three-year old straight line depreciation (i.e., over 36 months). It has also recently been eligible for Section 179 and that was included in the recent extender bill for 2010 and 2011.
Some software is eligible for Section 197 amortization if purchased with the business. I think other software is not.
See ยง197(e)(3)(A) where it describes such software not eligible for Section 197 as:Item (i) is off-the-shelf software and I believe item (ii) is what I believe you are describing.Any—
(i) computer software which is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified, and
(ii) other computer software which is not acquired in a transaction (or series of related transactions) involving the acquisition of assets constituting a trade or business or substantial portion thereof.Last edited by dtlee; 01-31-2011, 03:50 PM.Doug -
Thanks Doug
That is exactly what I was looking for!Comment
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