Items that Must be Amortized

Tax law designates specific types of capital expenditures that must be amortized over a prescribed number of years. The annual amortization amount is simply the cost of the item divided by the number of years in the amortization period.

The following expenditures must be amortized:

  • Section 197 Intangibles (amortize over 15 years).
    • These are intangible assets acquired in connection with the acquisition of a business.
  • Business start-up costs and organizational costs (amortize over 5 years)
  • Construction period interest and taxes
  • Research and experimentation costs
  • Bond premiums
  • Reforestation costs
  • Pollution control facilities
  • Costs of acquiring a lease

QuickBooks Self-Employed
For Freelancers and independent Contractors

- Organize your financial data into one central accounting system on the cloud
- Software kept up to date.
- Your data kept secure
- Anytime, anywhere data access.
- Pay your quarterly estimated taxes online.
- Export Schedule C to TurboTax at year-end for faster filing.
- Save up to 50% off QuickBooks Self-Employed. Track every deduction! Start your free trial now!

Have an accounting or bookkeeping question? Email it to me.