amortize

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Amortization

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.

amortize

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 ?
However, the final output targeted here is the amortized real estate cost -Cost_Am_RealE, and can be calculated as Cost_Am_RealE = [Cost_RealE * Ap_F] (Ap_F is Amortizable Parameter for Facility).
The amortizable premium on taxable bonds acquired on or after January 1, 1958 is the excess of the individual's tax basis for determining loss on sale or exchange of the bond (determined at the start of the year) over the amount payable at maturity, or in the case of a callable bond, the earlier call date if using the earlier call date would result in a smaller amortizable amount being allocated to the year.
Third, an estimate of amortizable intangible assets was subtracted from total assets.
Could such taxpayers argue that an asset which is identified as an amortizable Section 197 intangible under current law must also have been an amortizable intangible under prior law?
But, he cautioned, if you owned the vineyard in 1993 (before Section 197), and it was in a previously established AVA, the ruling would not apply, and your AVA-allocated value would not be amortizable.
A domain name that is an amortizable intangible would be included within the IRC section 1231 definition of a capital asset, as long as the domain name is not inventory in the hands of the taxpayer.
In order to clearly reflect income, the capitalized costs should generally be amortizable as a separate and distinct asset.
Generally the IRS takes the position that customer base assets are "indistinguishable from goodwill possessing no determinable useful life."(4) If intangible assets are classified as a component of goodwill then these assets are not amortizable under the current tax law, based on the "Mass Asset Rule."
743(b) basis adjustments will typically be allocable to otherwise amortizable Sec.
See Q 1121 for an explanation of how the amount of amortizable bond premium is determined.
In response, TEI said that transaction costs incurred in connection with taxable or tax-free transactions should be treated as giving rise to the creation of a new amortizable asset, thereby simplifying tax administration and minimizing factual disputes between taxpayers and the IRS.