If an accrual basis corporation incurs an additional expense in setting up its accounting system after the close of its first tax year but before the due date of its initial return, the expense qualifies as an organizational expense and may be amortized.

Question

Quizplus · Accepted Answer

An expense incurred after the close of the first tax year does not qualify as an organizational expense for amortization purposes. Organizational expenses must be incurred before the end of the first tax year.

If an Accrual Basis Corporation Incurs an Additional Expense in Setting