In tax law, amortization refers to the cost recovery system for intangible property.
However, many intangible assets such as goodwill or certain brands may be deemed to have an indefinite useful life, or “self-created” and are therefore not subject to amortization.
[1] The United States Congress gives taxpayers larger deductions in the early years of an asset’s useful life.
This led to taxpayers having the incentive to ignore any basis in the intangible asset until it was sold.
[3] Startup expenditures are defined as investigatory expenses incurred prior to commencing a trade or business activity which would have been deducted had they been paid or incurred when the taxpayer was already engaged in the trade or business activity.