Edison Corporation is organized on July 31.The corporation starts business on August 10.The corporation adopts a November 30 fiscal year end.The following expenses are incurred during the year: What is the maximum amount of organizational expenditures that can be deducted by the corporation for its first tax year ending November 30?

Question

Edison Corporation is organized on July 31.The corporation starts business on August 10.The corporation adopts a November 30 fiscal year end.The following expenses are incurred during the year:  What is the maximum amount of organizational expenditures that can be deducted by the corporation for its first tax year ending November 30?

Quizplus · Accepted Answer

According to the given information, Edison Corporation started business on August 10 and adopted a November 30 fiscal year end. Therefore, the corporation can only deduct organizational expenses incurred during the period from August 10 to November 30 of the first tax year.

The total amount of organizational expenses incurred during this period is $5,156. Therefore, option C is correct as it is the maximum amount of organizational expenditures that can be deducted by the corporation for its first tax year ending November 30. Options A, B, and D are incorrect as they exceed the actual amount of organizational expenses incurred during the eligible period.

Edison Corporation Is Organized on July 31