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mpetty87
New Member

In 2016 I purchased the business I had previously been a contractor for. Can I deduct that purchase?

I did not assume responsibility until January of 2017, but I made the initial payment in 2016.
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MinhT
Expert Alumni

In 2016 I purchased the business I had previously been a contractor for. Can I deduct that purchase?

The purchase price of a business is not deductible.

Usually, the purchase price can be divided in two parts: tangible assets (such as furniture, computers, equipment) and intangible assets (goodwill, patents, going concern). Tangible assets are depreciated over their useful life. Intangible assets are amortized over 15 years.

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2 Replies
MinhT
Expert Alumni

In 2016 I purchased the business I had previously been a contractor for. Can I deduct that purchase?

The purchase price of a business is not deductible.

Usually, the purchase price can be divided in two parts: tangible assets (such as furniture, computers, equipment) and intangible assets (goodwill, patents, going concern). Tangible assets are depreciated over their useful life. Intangible assets are amortized over 15 years.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
carozy
New Member

In 2016 I purchased the business I had previously been a contractor for. Can I deduct that purchase?

I am wondering the something similar - I made deductible business spending in December as I set up my independent contractor business but first payment won't come until mid January.  How to deduct the December expenses?
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