On January 1, 2022, Don Buchanan purchases a business that he will carry on as a sole proprietor. The purchase price includes $60,000 for goodwill. The business has a fiscal period that ends on December 31 and, for 2022, Don claims the maximum CCA. On January 1, 2023, the business is sold in an arm's length transaction with $82,000 paid for the goodwill. The affect of the sale of the goodwill is to increase net income for 2022 by: a. $14,000. b. $13,500. c. $15,500. d. $11,000.

Individual Income Taxes
43rd Edition
ISBN:9780357109731
Author:Hoffman
Publisher:Hoffman
Chapter4: Gross Income: Concepts And Inclusions
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On January 1, 2022, Don Buchanan purchases a business that he will carry on as a sole proprietor. The purchase price includes $60,000 for goodwill. The business has a fiscal period that ends on December 31 and, for 2022, Don claims the maximum CCA. On January 1, 2023, the business is sold in an arm's length transaction with $82,000 paid for the goodwill. The affect of the sale of the goodwill is to increase net income for 2022 by: a. $14,000. b. $13,500. c. $15,500. d. $11,000.

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