Teal Corporation is incorporated in November 2020.The following formation expenses are incurred in 2020: $$\begin{array} { l r }
\text { Legal and accounting expenses incident to organization } & \$ 4,000 \
\text { Expenses of temporary directors and organizational meetings of } & 2,000 \
\text { directors and shareholders } & \
\text { Expenditures connected with the transfer of assets to Teal } & 3,000
\end{array}$$ Except for the legal and accounting expenses that are paid in 2021, all other expenses are paid in 2020.If Teal Corporation uses the cash basis and adopts a calendar year for tax purposes, the maximum amount of organizational expenditures it can elect to expense for 2020 is.

Question

Teal Corporation is incorporated in November 2020.The following formation expenses are incurred in 2020: $$\begin{array} { l r } 
\text { Legal and accounting expenses incident to organization } & \$ 4,000 \
\text { Expenses of temporary directors and organizational meetings of } & 2,000 \
\text { directors and shareholders } & \
\text { Expenditures connected with the transfer of assets to Teal } & 3,000
\end{array}$$ Except for the legal and accounting expenses that are paid in 2021, all other expenses are paid in 2020.If Teal Corporation uses the cash basis and adopts a calendar year for tax purposes, the maximum amount of organizational expenditures it can elect to expense for 2020 is.

Quizplus · Accepted Answer

The Answer of Teal Corporation is incorporated in November 2020.The following formation expenses are incurred in 2020: $$\begin{array} { l r } 
\text { Legal and accounting expenses incident to organization } & \$ 4,000 \
\text { Expenses of temporary directors and organizational meetings of } & 2,000 \
\text { directors and shareholders } & \
\text { Expenditures connected with the transfer of assets to Teal } & 3,000
\end{array}$$ Except for the legal and accounting expenses that are paid in 2021, all other expenses are paid in 2020.If Teal Corporation uses the cash basis and adopts a calendar year for tax purposes, the maximum amount of organizational expenditures it can elect to expense for 2020 is.

Teal Corporation Is Incorporated in November 2020 Except for the Legal and Accounting Expenses That Are Paid