Question

Jasmine started a new business in the current year. She incurred $10,000 of start-up costs. How much of the start-up costs can be immediately expensed for the year?

A. $0
B. $2,500
C. $5,000
D. $10,000
E. None of these

Answer 1

Jasmine can immediately expense $5,000 of her start-up costs in the current year, with the remaining costs being amortized over a period of 180 months.

Step-by-step explanation:

The immediate expensing of start-up costs is determined by the Internal Revenue Service (IRS) rules. According to IRS rules, businesses can deduct up to $5,000 of start-up costs in the year they are incurred, with the remaining costs being amortized over a period of 180 months.

Since Jasmine incurred $10,000 of start-up costs, she can immediately expense $5,000 of those costs in the current year. The remaining $5,000 would be amortized over 180 months.

So, the correct answer is C. $5,000.