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1. A tax deduction for the gradual consumption of the value of an asset, especially an intangible asset. For example, if a company spends $1 million on a patent that expires in 10 years, it amortizes the expense by deducting $100,000 from its taxable income over the course of 10 years. It is often used interchangeably with depreciation, which technically refers to the same thing for tangible assets.

2. The act of repaying a loan in regular payments over a given period of time.


To write off gradually and systematically a given amount of money within a specific number of time periods. For example, an accountant amortizes the cost of a long-term asset by deducting a portion of that cost against income in each period. Likewise, an investor will usually amortize the premium each year on a bond purchased at a price above its principal.
References in periodicals archive ?
Any corporation that purchases or otherwise acquires intangible assets must answer the question of whether to amortize them.
A bank that acquires the right to service loans and sue escrow funds can amortize the value of the right because loans have a definite life span.
For taxable bonds issued after July 18, 1984 and/or purchased after April 30, 1993 (and for tax-exempt bonds purchased after April 30, 1993), the taxpayer may elect whether to amortize the market discount on an annual basis (under Sec.
461(g)(2) merely provides that the general requirement to amortize prepaid interest does not apply to points paid on qualifying debt incurred to purchase or improve a principal residence.
While the last exception is beyond the scope of this article, it generally allows a buyer to amortize a Sec.
195 provides that no deduction is allowed for start-up expenditures unless the taxpayer elects to amortize the expenditures.
For example, a corporation might claim a refund for tax years in which it followed the Service's position and accordingly did not amortize such loan costs.
Under this section, the lessee can assign a cost to the acquired lease and amortize it.
9% of personal income, and 66% of general revenue fund-supported debt amortizes within 10 years.
The 12year refinance loan amortizes on a 30-year schedule.
That is, the producer records them as an asset on the balance sheet and amortizes those costs over the income of Forrest Gump.