On June 1, 2017, Red Corporation purchased an existing business. With respect to the acquired assets of the business, Red allocated $300,000 of the purchase price to a patent. The patent will expire in 20 years. Determine the total amount that Red may amortize for 2017 for the patent
a. $0
b. $1,667
c. $11,667
d. $35,000
e. None of the above
c
RATIONALE: $300,000 × (7 months/180 months) = $11,667 . The statutory amortization period for § 197 intangibles is 15 years.
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