What is the depreciation period for Section 197 intangibles?
Understand the Problem
The question is asking for the specific duration of the depreciation period applicable to intangibles under Section 197 of the tax code. It presents multiple-choice options for a definitive answer.
Answer
15 years
Section 197 intangibles must be amortized over a 15-year period.
Answer for screen readers
Section 197 intangibles must be amortized over a 15-year period.
More Information
The amortization period for Section 197 intangibles, such as goodwill, intellectual property, and other intangible assets, is specifically set at 15 years, which is equivalent to 180 months, as per U.S. tax law. This period is used regardless of the actual useful life of the intangible asset.
Tips
A common mistake is trying to match the amortization period with the anticipated useful life of the intangible. For Section 197 intangibles, the 15-year period must be used regardless of the asset's expected useful life.
Sources
- Intangibles - IRS - irs.gov
- Understanding Section 197 Intangibles - FloQast - floqast.com
- 26 U.S. Code § 197 - Amortization of goodwill and certain other ... - law.cornell.edu
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