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Derek purchases a small business from Arton September 1, 2008. He paid the following amounts for the business.
Fixed assets $220,000
Goodwill $40.000
Covenant not to compete $45,000
Total $305,000
a. How much of the $305,000 purchase price is for Section 197 intangible assets?
b. What amount can Derek deduct on his 2008 tax return as Section 197 intangible amortization?
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