The MNO Partnership, a calendar year taxpayer, was formed on July 1 of the current year and started business on October 1. MNO incurred $30,000 in startup costs. MNO may deduct $5,000 and amortize the remaining $25,000 over 120 months starting in July.

Question

Quizplus · Accepted Answer

The amortization of startup costs begins when the business starts operations, not when the partnership is formed. Therefore, MNO should start amortizing the remaining $25,000 over 180 months starting in October, not July.

The MNO Partnership, a Calendar Year Taxpayer, Was Formed on July