Tory considered opening a cupcake store in Denver.He is not operating a similar business in any other location.After spending $8,600 on a market study,he decided against opening the store on August 1.What is the maximum amount of deduction for the current year attributable to this expenditure?

Question

Quizplus · Accepted Answer

The market study expense is considered a start-up cost, which is generally not deductible until the business begins operating. Since Tory decided against opening the store, he cannot deduct any portion of the $8,600 on his current year's tax return. Therefore, the maximum deduction for the current year is $0.

Tory Considered Opening a Cupcake Store in Denver