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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 ?
If a taxpayer changes to the design-by-design method, the section 481(a) adjustment equals the difference between (i) the total amount of package design costs subject to capitalization and not abandoned as of the beginning of the year of change that were deducted or amortized in tax years before the year of change, and (ii) the amount of amortization that would have been allowed if the design-by-design method had been used.
Start-up and organizational expenditures incurred on or before that date continue to be eligible to be amortized over a period not to exceed 60 months; however, they are still considered in applying the $50,000 deduction phaseout.
The assets can be amortized using the old or the new law-- whichever yields greater tax savings.
If the hedging rules did apply, the payment should have been amortized under the terms of the bond and the period to which the hedge related.
197, and the payments of the covenant would therefore be amortized over the life of the agreement.
For CMOs carried at amortized cost, the task force decided: At the purchase date, calculate an effective yield based on the purchase price and anticipated future cash flows.
The amount of OID amortized each year for both taxable and tax-exempt bonds increases the taxpayer's basis in the bonds.
503 US 79 (1992), the IRS has contended that many expenditures previously considered currently deductible must be capitalized, and cannot be depreciated or amortized.
The number of months (not less than 60) over which the expenditures are to be amortized.