On April 2, Reid Inc., a calendar year taxpayer, paid a $750,000 lump-sum price to purchase a business. The appraised FMVs of the balance sheet assets were:Accounts receivable?$ 38,000??Inventory?415,000??Fixtures and equipment? 147,000????$ 600,000??Which of the following statements is false?
A. Reid's amortization deduction for the current year is $7,500.
B. Reid may amortize the $150,000 cost for both book and tax purposes.
C. Reid must capitalize $150,000 of the cost as purchased goodwill.
D. None of the above is false.
Answer: B
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