Question

Racine started a new business in the current year. She incurred $52,000 of start-up costs. If her business started on November 23rd of the current year, what is the total amount she may deduct with respect to the start-up costs for her initial year, rounded to the nearest whole number?

A. $2,555B. $3,544C. $5,522.D. $52,000E. None of these

Answer 1

B. $3,544

Step-by-step explanation:

$5,000 of startup expenses can be expensed immediately. if startup cost incurred more than 50,000 then the immediate expensing is $5,000 - ($52,000 - $50,000) = $3,000. plus amortaization of (52,000 - $3,000)/180 * 2months = $544.

total expense she may deduct = $3,000 + $544 = $3,544