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| | Amortization of Intangibles under Sections 167 and 197 |
 | | Section 197 was added to the Code by the Omnibus Budget Reconciliation Act of 1993 and affects taxpayers that acquired intangible property after August 10, 1993, or made a retroactive election to apply the 1993 law to intangibles acquired after July 25, 1991. |
| | A "section 197 intangible" -- which includes goodwill, going concern value, workforce in place, information base, know-how, customer- and supplier-based intangibles, governmental licenses and permits, covenants not to compete and other similar arrangements, franchises, trademarks, trade names, and contracts for the use of the foregoing assets -- is defined in Prop. |
| | We believe that the proposed definition of section 197 intangible property is so broad that it reaches many ordinary, intercompany royalty payments that are deductible under section 162 of the Code, and that, we submit, Congress did not intend to affect by enacting section 197. |
| www.taxnews.com /tnn/tei/tei_doc_public.nsf/85256396005ac84685256244005d3a03/51d2186721de379b85256a7300617960 (2613 words) |
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