Question

Pankraz Corporation, a calendar year taxpayer, is formed on April 1, 2020. In connection with its formation, it incurs organizational expenditures of $54,000. Pankraz wants to claim as much of these expenses as soon as possible. Round per month amount to two decimal places. Round your final answer to the nearest dollar. Therefore, its deduction for 2020 is $fill in the blank 1

Answer 1

$3,650

Step-by-step explanation:

Calculation to determine its deduction i

First step is to calculate the Expense

Expense=$5,000 - ($54,000 - $50,000)

Expense=$5,000-$4,000

Expense= $1,000

Second step is to calculate the Amortization

Amortization= ($54,000 - $1,000)/180 months

Amortization= $294.44 x 9 months

Amortization= $2,649.99

Amortization= $2,650 (Approximately)

Now let calculate the total deduction

Total deduction =$1,000 + $2,650

Total deduction= $3,650

Therefore, its deduction for 2020 is $3,650