Sect 197 Intangibles Defined

In a nutshell, intangible property is property that cannot be seen or touched.

It includes: goodwill, going concern, workforce in place, business books and records, operating system, list of customers, supplier base patent, copyright, formula, process, design, pattern, know how, license, permit or other rights granted by a government unit, a covenant not to compete, franchise, trademark, trade name, a contract for the use of any item in the list.

Generally amortized over 15 Year for intangible acquired after Aug 10, 1993. You must amortize these costs if you hold the sect 197 intangible in connection with your trade or business or in an activity engaged in the production of income.

However, you cannot amortize any of the following  intangibles that you created: goodwill, going concern value, workforce in place, business books and records, patent, copyright, formula, process, design, pattern, know-how, format, customer based and supplier based intangible.

I created this blog to help understand certain basic aspects of U.S. tax law. Of course, each situation is unique and nothing that is on this site will ever replace the expert advice of a tax professional.

Please do not hesitate to contact me should you have any question.

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