I bought my father in-law's cleaning business. There is no equipment involved just the client base. I paid a down payment and I am making monthly payments for the remainder of the purchased business. My understanding is that I have to amortize this on schedule C, but I am not sure over how many years. Any help and additional comments are greatly appreciated.
Pub 535 covers this topic--180 month amortization of Sect 197 intangibles.
The amount of your down payment is irrelevant, you will use the total cost of the purchase to calculate the deduction. Things can get a little stickier with the interest (there can be "implied interest,") you and your father-in- law may want a consult on that.
IRS Circular 230 Disclosure: To comply with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained herein (including any attachments), is not intended or written to be used, and cannot be used, for the purposes of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.