A calendar-year corporation incurs $53,000 of start-up costs. If the corporation began business on August 1 of the current year, what is the maximum amount of the start-up costs that it can deduct against business income in the current year? (round your answer to the nearest dollar)

Question

Quizplus · Accepted Answer

Taxpayers are allowed $5,000 in the ﬁrst year, plus amortization of the remaining balance over 180 months. the $5,000 is reduced, however, by the amount by which start-up costs exceed $50,000. ftus, in this case, the corporation may deduct $2,000 plus ($51,000 / 180 months × 5 months) = $3,417.

A Calendar-Year Corporation Incurs $53,000 of Start-Up Costs