Business purchase cost

I purchased a business from the previous owner in 2001. Is the purchase price of that business deductible? Can that be a one time deduction or does it have to be depreciated?

Thank you.

If this is a corporation, then you probably bought the stock and you can not depreciate it or deduct it. You will have a gain or loss on the sale or other disposition of the stock.

If this was a sole proprietorship, you probably bought assets and maybe goodwill. You can depreciate the assets, but you can not deduct or depreciate the goodwill unless it is only good for a limited period of time, in which case you can amortize it.

This can get fairly complicated. I suggest you read the IRS material, which you can download for free at http://www.irs.ustreas.gov/prod/bus_info/sm_bus/pre-start.html

Thank you very much Loku for your reply. The business was an online business so the purchase price included the website, the domain name, reseller rights, etc.

Thank you.