Amortization

[twalker69]

I had a client purchase a trash route. Does the purchase price have to be amortized over 15 years or can it be amortized for fewer years? Also, can any or all of the price be claimed under section 179?

Thanks,

[Bees Knees]

If it is the purchase of goodwill, or a customer list, it is amortized over 15 years under section 197 and cannot be expensed under section 179.

[Kram BergGold]

Allocation

There is a form, I can't remember it's number, on which the buyer and seller agree as to what kind of assets are being sold and purchased. I assume they did not execute this form. Given that, I think you have to go with the worst case scenario.

[Burke]

It is Form 8594.

[Koss]

Trash Route

That asset's probably not worth anything at all. It's garbage.

Over what time period would you amortize trash?

Over the length of time it takes to decompose at the landfill?



Geez, for some plastics, isn't that like a couple hundred years?

The attached photo is my favorite description of amortization...

BMK

[twalker69]

Amortization

Thanks for the help. I appreciate the responses. My client originally told me they were paying rent for the use of the customer which I was unsure how to handle. However, I pressed them further and found that there was a set number of clients that they were purchasing for a certain amount of money. That is when I figured we needed to amortize the purchase price. Thanks for helping me get this correct for my client. Have a great weekend.