Starting Your Business/Keeping Records
What are Business Expenses
Patents/Copyrights/Agreements Not to Compete

Intangible property is property that has value but cannot be seen ortouched.

Generally, you can either amortize or depreciate intangibleproperty. You must amortize certain intangible property over 15 years if you meet thefollowing conditions.

• You acquired the property after August 10,1993, (after July 25, 1991, if elected).
• You use the property in connection with a business or for the production of income.

If you meet these conditions, amortize the following intangibles.

1. Patents and copyrights.
2. Customer or subscription lists, location contracts, and insurance expirations.
3. Designs and patterns.
4. Franchises.
5. Agreements not to compete.

Caution: If you created any of the intangibles listed in items(1) through (3), you can amortize them only if you created them in connection with theacquisition of assets constituting a trade or business or a substantial part of a trade orbusiness.

For more information on amortization, see chapter 12 in Publication 535.

Agreementnot to compete

Important References

Publication 946                     How to Depreciate Property
Form 4562                             Depreciation and Amortization
Publication 535                     Business Expenses
hotel rooms AthensInstructions for Form 4562