Alabaster Corporation,a calendar year taxpayer,was formed on July 1,2016,and incurred organizational expenditures of $52,000.Its deduction for these expenditures for 2016 can be a:

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Organizational expenses incurred after October 22, 2004, are generally deducted over the course of 180 months, starting with the month in which the entity begins doing business. However, the deduction is limited to $5,000, with a phase-out threshold of expenses exceeding $50,000. In this case, because Alabaster Corporation was formed on July 1, 2016, it began doing business on that date. Therefore, it can deduct $3,000 for 2016, which is the maximum deduction allowed after the company has spent more than $51,000. The remaining $49,000 must be amortized over 180 months, beginning in July 2016.

Alabaster Corporation,a Calendar Year Taxpayer,was Formed on July 1,2016,and Incurred