The term "going concern value
" should be abandoned for two reasons.
197 intangibles fall in Class III because Class IV includes only goodwill and going concern value
Among other items, Section 1060(b) requires both the transferor and transferee to inform the secretary as to the amount of the consideration which is allocated to goodwill or going concern value
It should be noted that the intangibles of goodwill or going concern value
of a business are not of like kind to the goodwill or going concern value
of another business under Regs.
Measuring business enterprise value (BEV) is an important part of many appraisal assignments, but debate continues over the appropriate techniques for extracting this component of going concern value
. In this article, we propose a new method for estimating BEV in certain special purpose properties.
A "section 197 intangible" -- which includes goodwill, going concern value
, workforce in place, information base, know-how, customer-and supplier-based intangibles, governmental licenses and permits, covenants not to compete and other similar arrangements, franchises, trademarks, trade names, and contracts for the use of the foregoing assets -- is defined in Prop.
Commissioner, the taxpayer allocated the purchase price to the cost of the right to service mortgage loans, but the Tax Court allocated some of the purchase price to nondeductible goodwill and going concern value
The IRS believes that goodwill and going concern value
are "so inherently unique and inseparable from the business" that they can never be of like kind with any other goodwill or going concern value
Both must be extracted from going concern value
when the revenues and operating expenses of the business(es) occupying the real estate are intertwined with those of the real estate.
The IRS can no longer deny deductions for assets in the nature of goodwill and going concern value
, and taxpayers must accept an amortization period of 15 years for most intangibles, notwithstanding a possibly shorter economic life.
Under the residual method of allocating purchase price, internally developed software is in a different asset class from goodwill and going concern value
. (11) Taxpayers that do not focus on software that is part of a divested business may in effect cause the purchase price attributable thereto to be allocated to the residual category of goodwill and going concern.
Therefore, for most businesses, the entire pie (going concern value
) consists of two components [ILLUSTRATION FOR FIGURE 1 OMITTED]: the value of real estate (REV) and the value of the business enterprise (BV).