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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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I have a tax accounting question:

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I have a tax accounting question:

Lev :

Hi and welcome to our site!
Please post your question...

Customer:

I have a picture with numbers I'd like for you to see,

Customer:

How can I send it to you?

Lev :

You may attach image to this page - you shoudl use a clip icon in the bar

Customer:

OK.. let me try

Lev :

Let me know if works

Customer:

No.. it did not work

Customer:

We purchased a company, for 10,000, asset purchase

Customer:

And we assigned the 10,000 to 7 different classes per 8594

Customer:

Book basis for intangibles was 4,400

Customer:

Tax basis for intangibles was 4,000, with 400 being reported as Class III A/R

Customer:

Book amortizes on the basis of 4,400

Customer:

Tax amortizaes on the basis of 4,000

Customer:

Should we create a deferred tax for the basis difference between book intangibles and tax intangibles of $400?

Lev :

I do not see "deferred tax" here ... just treat each asset separately.

Customer:

That's what I thought.

Customer:

Someone told me whenever there is a book basis vs tax basis difference, you need to create a deferred tax

Customer:

What did you mean with "treat each asset separately"?

Lev :

The Class III asset will have the tax basis based on the purchase price. As long as the asset is not disposed - there is no taxable event and there is no "deferred tax"
I feel that someone advised you to use a trick to have books look nice - that is a different issue. But from tax prospective - there is no deferred tax.

Customer:

Thank you. You have been very helpful!

Lev and other Tax Specialists are ready to help you

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