Amortization definitionQuestion What is amortization and how is it calculated?
Answer Amortization is conceptually similar to depreciation. It's an allowance for the cost of certain capital expenditures, such as goodwill and trademarks, acquired in the purchase of a business.
Amortization can be claimed only if it's specifically allowed by the tax law. It's always deducted prorata over the life of the property. 
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Author of J.K. Lasser's Small Business Taxes 2007
Related Categories: Accounting, Finance, Taxes
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