Business Purchase cost

[Melanie]

TP purchase a business for 80k (he received access to websites and vip wholesale pricing for Travel Arrangement & Reservation Services) does this amount can be deduct it as a business expense under amortization or depreciation for life of 15 years?

according to the TTB 8-18- purchase of a business is capital expenses and cannot be amortized however TTB 8-5 Capital Cost- the cost of purchasing intangible business property are Capital cost that can be deducted through depreciation and amortization.

So which one is it?

In advance thank you for your replies

[Melanie]

After further research I think I found the answer...the business purchase cost falls under amortizable section 197-intangibles TTB 9-11 Goodwill, Supplier based intangible, operating system, other rights granted by agency. Does this sound about right?

[spanel]

After further research I think I found the answer...the business purchase cost falls under amortizable section 197-intangibles TTB 9-11 Goodwill, Supplier based intangible, operating system, other rights granted by agency. Does this sound about right?

Sounds right to me.

Chris

[Melanie]

Thanks Chris

[ttbtaxes]

Who did he buy the service from...another business? If so, is there a covenant not to compete? Any "hard assets" sch as equipment, computers?

[Melanie]

No assets only the system, suppliers list and rights to advertise