I have a client who purchased a distributorship route in Colorado. I am not sure how to account for this on his Schedule C return. He took out a business loan to purchase the distributorship. Can this be treated like a franchise and amortized or as a company asset with the interest on the loan expensed. Thanks!
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Capitalize the purchase price, 15 year write off and deduct the interest on the loan per an amortization schedule.This post is for discussion purposes only and should be verified with other sources before actual use.
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Although a distributorship route or a sales territory is not specifically spelled out in the Code or Regs, I believe it is similar to several of the items that are listed in the section 197 intangibles rules. Accordingly, I believe a distributorship route does qualify for 15-year amortization per Code ยง197.Roland Slugg
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Thank you Roland! I do appreciate your input! Capitalize and write off over 15 years it is! I had a heck of time trying to find any information on distribution routes.. In fact, I found none!! Many companies are using this method of getting their product out, most of these in the food industry! Thank you again!Comment
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If you look under "Goodwill" you will find the needed info.This post is for discussion purposes only and should be verified with other sources before actual use.
Many times I post additional info on the post, Click on "message board" for updated content.Comment
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