Acquired franchise rights, trademarks, and goodwill don’t get amortized over their actual useful life or agreement term — the tax code fixes them at exactly 15 years, regardless.
How it works
Dividing the acquired intangible cost by the fixed 15-year statutory period gives the annual amortization deduction.
What this does not include
This does not include self-created intangibles (which generally don’t qualify for Section 197 treatment) or the specific rules for amortization starting mid-month in the month of acquisition, which can make the first and last years’ deductions slightly different from a full year’s amount.
How to use this calculator
- Enter the acquired Section 197 intangible cost.
Frequently asked questions
Why exactly 15 years, regardless of the franchise term?
Congress set a single, simple, fixed period specifically to avoid endless disputes over the “true” useful life of goodwill and similar intangibles, which are inherently hard to estimate.
What else counts as a Section 197 intangible besides franchise rights?
Goodwill, going-concern value, trademarks, trade names, customer lists, and non-compete agreements acquired in connection with a business acquisition are all common examples.
What happens if the intangible becomes worthless before 15 years?
Special rules can allow accelerated write-off in limited circumstances, but generally the taxpayer continues amortizing on the original schedule even if the asset’s real-world value has declined.
