Consistent amortization of periods for intangibles.

• Author: Schneider, Steven

Start-up expenditures and organizational expenditures (including expenditures to organize a partnership) may be amortized over a period of not less than 60 months. In contrast, Sec. 197 requires most acquired intangible assets (e.g., goodwill, trademarks, franchises and patents) held in connection with the conduct of a trade or business or an activity for the production of income, to be amortized over 15 years.

New Law

AJCA Section 902 modifies Secs. 195's and 709's treatment of start-up expenditures and organizational expenditures. A taxpayer can elect to deduct up to $5,000 of start-up and $5,000 of organizational expenditures in the tax year in which the trade or business begins. Each $5,000 amount, however, is reduced (but not below zero) by the amount by which the cumulative startup or organizational expenditures exceed $50,000, respectively. Start-up and...