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

Green Corporation can choose to deduct up to $5,000 of organizational expenses in the year it begins business. The remaining $28,028 can be amortized over a period of 180 months (15 years) starting from the first month of operations, which in this case would be June. Therefore, the deduction for organizational expenses if Green chooses to deduct its costs as soon as possible is $5,000.

Green Corporation Is Incorporated on March 1 and Begins Business