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Intangible property is used in distinction to tangible property. It is useful to note that there are two forms of intangible property: legal intangible property (which is discussed here) and competitive intangible property (which is the source from which legal intangible property is created but cannot be owned, extinguished, or transferred).
In tax law, amortization refers to the cost recovery system for intangible property.Although the theory behind cost recovery deductions of amortization is to deduct from basis in a systematic manner over an asset's estimated useful economic life so as to reflect its consumption, expiration, obsolescence or other decline in value as a result of use or the passage of time, many times a perfect ...
Intangible asset finance, also known as IP finance, is the branch of finance that uses intangible assets such as intellectual property (legal intangible) and reputation (competitive intangible) to gain access to credit. Intangible assets can for example be used in equity finance.
The term "property" includes cash, tangible and intangible property, but "services" are specifically excluded. Generally, a partnership interest can be acquired in exchange for services, but this transaction does not qualify under Sec. 721. [20]
Accountants distinguish personal property from real property because personal property can be depreciated faster than improvements (while land is not depreciable at all). It is an owner's right to get tax benefits for chattel, and there are businesses that specialize in appraising personal property, or chattel.
However, some property, despite being physical in nature, is classified in many legal systems as intangible property rather than tangible property because the rights associated with the physical item are of far greater significance than the physical properties. Principally, these are documentary intangibles.
The IRS defines depreciation, which is used to expense tangible assets, as “an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property.
1231 Property is a category of property defined in section 1231 of the U.S. Internal Revenue Code. [1] 1231 property includes depreciable property and real property (e.g. buildings and equipment) used in a trade or business and held for more than one year. Some types of livestock, coal, timber and domestic iron ore are also included.