Intangible Assets: Appraisal on purchase, abuse, stuffing
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Intangible assets are typically amortized over a 15 year period compared to 5- and 7- year assets. Can anyone see how a taxpayer might want assets appraised upon purchase? Any potential for abuse? When does "stuffing" become evasion as opposed to avoidance?
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Solution Summary
This 276 word solution clearly explains how there is the potential for abuse in valuing assets on purchase. Several examples explain the potential. The anti-stuffing rule is referenced to a code section with further explanation. Additionally, the solution provides a link to an article that provides evidence on the topic and goes into more detail.
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With five and seven year assets, having them valued at more rather than less will provide more depreciation for a company. Most companies would be happy with more expense and less income tax, and an appraisal of purchased assets could be the answer.
But consider a 39 year asset consisting of a building used in production. In these economic times, the value of a commercial building might be overstated. Using the value ...
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