orgainzation_costs - (relating to trademark and trade name...

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E&P adjustment for organizational expenditures Explanation from CCH Tax Research Network (1) Computation of Earnings and Profits: Computation of Earnings and Profits: Trademark, trade name, organizational and circulation expenses Amounts that are deductible in computing taxable income under Code Sec. 173 , relating to circulation expenses and Code Sec. 248 , relating to organizational expenses must be capitalized and treated as part of the basis of the asset to which they relate. The Committee Report on P.L. 98-369 also states that, if the asset has a reasonably determinable life, the expenditures related to that asset may be recovered for earnings and profits purposes over that life (see ¶15,600.016 ). (2) From the Congressional Report Committee Reports on P.L. 98-369 (Deficit Reduction Act of 1984) Explanation of Provision Certain trademark, trade name, and other expenditures Amounts amortized under sections 173 (relating to circulation expenditures), 177
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Unformatted text preview: (relating to trademark and trade name expenditures), and 248 (relating to organizational expenditures) are to be capitalized and treated as part of the basis of the asset to which they relate. Expenditures made in connection with property having a reasonably determinable useful life are to be recovered for earnings and profits purposes over such useful life. There will be no amortization for expenditures made in connection with property which does not have a reasonably determinable limited useful life. This provision is applicable to the effect on earnings and profits of amounts paid or accrued in taxable years beginning after the date of enactment. In problem 27, this would lead to a positive adjustment to E&P of $933 (14,000/180 months x12) since the organizational expenditures had been amortized over 15 years (no Sec 248 election in 2010)....
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This note was uploaded on 09/09/2011 for the course TAX 5015 taught by Professor Kelliher,c during the Spring '08 term at University of Central Florida.

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