Vane Company,a calendar year taxpayer,incurred the following expenditures in the preoperating phase of a new health and fitness center. Which of the following statements is true?
A)If Vane already operates seven other health and fitness centers,it can deduct the $10,415 preoperating expenditures of the eighth center as expansion costs.
B)If Vane is a cash basis taxpayer,it can deduct $10,415 in the year of payment.
C)If the new center represents a new business for Vane,it must capitalize the $10,415 preoperating expenditures.
D)None of the above is true

Question

Vane Company,a calendar year taxpayer,incurred the following expenditures in the preoperating phase of a new health and fitness center.  Which of the following statements is true?
A)If Vane already operates seven other health and fitness centers,it can deduct the $10,415 preoperating expenditures of the eighth center as expansion costs. 
B)If Vane is a cash basis taxpayer,it can deduct $10,415 in the year of payment. 
C)If the new center represents a new business for Vane,it must capitalize the $10,415 preoperating expenditures. 
D)None of the above is true

Quizplus · Accepted Answer

The Answer of Vane Company,a calendar year taxpayer,incurred the following expenditures in the preoperating phase of a new health and fitness center.  Which of the following statements is true?
A)If Vane already operates seven other health and fitness centers,it can deduct the $10,415 preoperating expenditures of the eighth center as expansion costs. 
B)If Vane is a cash basis taxpayer,it can deduct $10,415 in the year of payment. 
C)If the new center represents a new business for Vane,it must capitalize the $10,415 preoperating expenditures. 
D)None of the above is true

Vane Company,a Calendar Year Taxpayer,incurred the Following Expenditures in the Preoperating