Starting Your Business/Keeping Tax Records
What are Business Expenses
Patents/Copyrights/Agreements Not to Compete
Intangible property is property that has value but cannot be seen or
touched.
Generally, you can either amortize or depreciate intangible
property. You must amortize certain intangible property over 15 years if you meet the
following conditions.
- You acquired the property after August 10,1993, (after July 25, 1991,
if elected).
- You use the property in connection with a business or for the
production of income.
If you meet these conditions, amortize the following intangibles.
- Patents and copyrights.
- Customer or subscription lists, location contracts, and insurance
expirations.
- Designs and patterns.
- Franchises.
- Agreements not to compete.
Caution: If you created any of the intangibles listed in items
(1) through (3), you can amortize them only if you created them in connection with the
acquisition of assets constituting a trade or business or a substantial part of a trade or
business.
For more information on amortization, see chapter 9 in
Publication
535.
Agreement
not to compete
Important References
Publication
946
How to Depreciate Property
Form
4562
Depreciation and Amortization
Publication
535
Business Expenses
Instructions
for Form 4562