|
|
Article: The ins and outs of sec. 197. (acquired intangibles)
- Article from:
- The Tax Adviser
- Article date:
- October 1, 2006
- Author:
CopyrightCOPYRIGHT 2006 American Institute of CPA's. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
|
Sec. 197 covers the proper tax treatment for most acquired intangible assets. Prior to its enactment in 1993, entities that acquired another trade or business faced the heavy burden of a two-pronged test to amortize acquired intangibles. The taxpayer had to estimate the intangible asset's useful life and ascertain a value; see Newark Morning Ledger Co., 507 US 546 (1993). There was no concrete definition of an intangible asset, nor guidance on estimated useful life.
For intangibles assets acquired after Aug. 10, 1993, Sec. 197 removed the uncertainty, by promulgating a list of intangibles that can be amortized for tax purposes over a 15-year life. Certain ...