I have done some extensive research and can answer my own question. I'm posting to save anybody else the headache of figuring it out. You can write off the purchase of a business, but it has to be depreciated over a 15 year period. This does not include material assests, which would be listed seperately and deprecitated seperately. In my case, the purchase of my business was mainly buying a company name, rights to contracts and customer lists. I have to take the full purchase price, regardless of any payment plan I am under and depreciate the full amount of the contracted purchase price and depreciate it over 15 years. If you buy a company that is partly material assets AND customer lists and such, you must assess a value to each material item, deduct that from the purchase price and depreciate it seperately under the IRS guidelines for expected life of the specific item. The smart way to do this would be drafting a contract when buying a company or business that breaks down the value of material items. IE: The purchase of a $100,000 business with a $35,000 vehicle and $15,000 in office supplies included would leave a value of $50,000 towards customer lists, contracts and non-material assets. You depreciate the $50,000 over 15 years, the $35,000 vehicle over 5 years and things like the computer and office supplies over 3 years. Does that help anyone?

Good answer. I would also add, that if anyone is going into business for their self, they should have their own lawyer who specializes in small businesses.