McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 30

Juliette formed a new business to sell sporting goods this year.The business opened its doors to customers on June 1.Determine the amount of start-up costs Juliette can immediately expense (not including amortization) this year in the following alternative scenarios.a.She incurred start-up costs of $2,000.b.She incurred start-up costs of $45,000.c.She incurred start-up costs of $53,500.d.She incurred start-up costs of $63,000.e.How would you answer parts (a-d) if she formed a partnership or a corporation and she incurred the same amount of organizational expenditures rather than start-up costs (how much of the organizational expenditures would be immediately deductible)?