Daschle LLC completed some research and development during June of the current year. The related costs were $60,000. If Daschle wants to capitalize and amortize the costs as quickly as possible, what is the total amortization amount Daschle may deduct during the current year?
A)$0
B)$6,500
C)$7,000
D)$12,000
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

The maximum amount of amortization that Daschle may deduct during the current year is $7,000. This is because the costs were incurred in June, and the amortization period for research and development costs is 60 months. Therefore, Daschle may deduct 1/60 of the $60,000 costs, or $1,000, for each of the six months remaining in the current year.

Daschle LLC Completed Some Research and Development During June of the Current