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Article: Treatment of capitalized costs of intangible assets: this two-part article provides an overview of cost recovery for intangible asset expenditures. Part 2 covers the income-forecast and units-of-production methods, computer software, transaction costs and sec. 195 deductions.(part 2)
- Article from:
- The Tax Adviser
- Article date:
- May 1, 2007
- Author:
CopyrightCOPYRIGHT 2007 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)
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EXECUTIVE SUMMARY
* In many cases, taxpayers may be eligible to accelerate amortization deductions using the income-forecast or units-of-production methods.
* Transaction costs are added to the basis of acquired intangible assets, acquired stock or, in the case of a tax-free reorganization, a separate intangible asset.
* When acquiring a business, investigatory costs are amortized over 15 years, but facilitative costs may not be amortized.
This two-part article examines how capitalized costs of intangible assets are recovered. Part I, in the April 2007 issue, explained the INDOPCO regulations (17) and capitalization and amortization in ...