Which of the following statements is correct in connection with the investigation of a business?
A)If the taxpayer is not already engaged in the trade or business, the expenses incurred are deductible if the project is abandoned.
B)Expenses may be deducted immediately by a taxpayer engaged in a similar trade or business regardless of whether the business being investigated is acquired.
C)That business must be related to the taxpayer's present business for any expense ever to be deductible.
D)Regardless of whether the taxpayer is already engaged in the trade or business, the expenses must be capitalized and amortized.
E)None of these.

Question

Quizplus · Accepted Answer

According to IRS regulations, a taxpayer engaged in a similar trade or business can deduct expenses immediately, regardless of whether the business being investigated is acquired. Option A is incorrect because expenses incurred are only deductible if the taxpayer is already engaged in the trade or business. Option C is incorrect because the expenses may still be deductible if they are related to a potential future business. Option D is incorrect because expenses may be immediately deductible instead of being capitalized and amortized.

Which of the Following Statements Is Correct in Connection with the Investigation