Which of the following statements is correct in connection with the investigation of a business?
A)If the taxpayer is not already engaged in the trade or business,the expenses incurred are deductible if the project is abandoned.
B)If the business is acquired,the expenses may be deducted immediately by a taxpayer engaged in a similar trade or business regardless of whether the business being investigated is acquired.
C)That business must be related to the taxpayer's present business for any expense ever to be deductible.
D)Regardless of whether the taxpayer is already engaged in the trade or business,the expenses must be capitalized and amortized.
E)None of these.

Question

Quizplus · Accepted Answer

If the taxpayer is engaged in a similar trade or business and acquires the business being investigated, the expenses may be deducted immediately. This is based on the concept of "similar" businesses, not necessarily related to the taxpayer's present business. Options A and D are incorrect because expenses may be deductible immediately, depending on the circumstances. Option C is incorrect because expenses may be deductible for similar businesses, even if they are not directly related. Option E is incorrect as there is a correct option.

Which of the Following Statements Is Correct in Connection with the Investigation