Final answer:
Costs associated with a newly acquired property for business use are typically capitalized and depreciated over the useful life of the property, making them partially deductible over several years. Immediate expense deductions may apply under certain tax provisions, but these have specific qualifications.
Step-by-step explanation:
When it comes to the costs associated with acquiring and preparing a new property for use, these are typically considered capital expenses. Capital expenses are not fully deductible in the year that you incur them. Instead, they must be capitalized and generally depreciated over the useful life of the property. This means that the costs are deductible over a period of years, according to the depreciation schedule that applies to the type of property you have acquired.
As for the options provided, the most accurate would be (b) Partially deductible. This is because you can deduct the expenses indirectly through depreciation. However, there are certain immediate expense deductions or write-offs that you may be able to take under specific sections of the tax code, such as Section 179, but these have limitations and qualifications that must be met. Furthermore, certain start-up costs may also be deductible under different rules.
It is important to consult with a tax professional to understand the applicable rules and how they apply to your specific situation. Tax laws can be complex, and they change frequently, so professional advice is always recommended when dealing with tax deductions for newly acquired property.