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An owner of a pharmacy office inquires for how many years they may continue to deduct the amortization of their goodwill at 5 percent. The DGT responds that the amortization is deductible with a maximum annual limit of one twentieth of its amount.
Question posed: Number of years during which the amortization expense of goodwill may continue to be deducted by applying a percentage of 5 percent.
The amortization of goodwill is tax deductible with a maximum annual limit of one twentieth of its amount, which is equivalent to 5 percent. Insofar as it is deducted at that percentage, the period to consider the goodwill fully amortized shall be 20 years.
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