A taxpayer opens a new business this year.Prior to opening,she incurred $45,000 of business investigation and preopening costs.The taxpayer can elect to currently deduct $5,000 and amortize the balance over 180 months.

Question

Quizplus · Accepted Answer

This is true. The taxpayer has the option to deduct $5,000 in the current year and amortize the remaining $40,000 over the next 180 months. This is allowed under Section 195 of the Internal Revenue Code.

A Taxpayer Opens a New Business This Year