What is amortization, and how does it work?
by TurboTax• Updated 4 weeks ago
Many taxpayers are familiar with depreciation, the practice of deducting the value of an asset over time, but fewer are familiar with depreciation’s cousin, amortization.
Amortization works like depreciation for intangible (non-physical assets) such as refinance expenses, goodwill, patents, and copyrights.
Unlike depreciation, there are no accelerated or bonus options. Amortized assets are deducted evenly across their useful life using the straight-line method.
Amortization commonly occurs when you refinance your home and pay points, own a small business, or rent a property.
View the following sections for information about entering amortization of assets in TurboTax.
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