Green Corporation is incorporated on March 1 and begins business on June 1.Green's first tax year ends on October 31,i.e.,a short year.Green incurs the following expenses during the year: What is the deduction for organizational expenses if Green chooses to deduct its costs as soon as possible?

Question

Green Corporation is incorporated on March 1 and begins business on June 1.Green's first tax year ends on October 31,i.e.,a short year.Green incurs the following expenses during the year:  What is the deduction for organizational expenses if Green chooses to deduct its costs as soon as possible?

Quizplus · Accepted Answer

B) Amortization of organizational expenses does not include the stock commission, which reduces paid-in capital, and the charter modification, which is incurred after the initial year-end.
$2,000 + $2,000 + $2,000 = $6,000 - $5,000 = $1,000/180 mo. × 5 mo. = $28
$5,000 + 28 = $5,028

Green Corporation Is Incorporated on March 1 and Begins Business