Answer: See explanation
Step-by-step explanation:
Here are the tax consequences listed below:.
1. Blaze deducts the $7000 of expense
2. Blaze cannot deduct any of the $7000 of expense.
3. Blaze deducts $5000 of the expenses and ammortizes the $2000 over a period of 180 months.
1. Blaze deducts the $7000 of expense
The entire expenses of $7000 can be deducted by Blaze because the expenses have been incurred for the investigation of the business acquiring.
2. Blaze cannot deduct any of the $7000 of expense
Blaze cannot be able to deduct any of the $7000 of expense in a case whereby the business that was investigated wasn't a restaurant and in this case, he didn't acquire it.
3. Blaze deducts $5000 of the expenses and ammortizes the $2000 over a period of 180 months.
In this case, the business wasn't a restaurant but he still ended up getting the business.