Vane Company, a Calendar Year Taxpayer, Incurred the Following Expenditures

Multiple Choice

Vane Company, a calendar year taxpayer, incurred the following expenditures in the preoperating phase of a new health and fitness center. Which of the following statements is true?

A) If Vane already operates seven other health and fitness centers, it can deduct the $10,415 preoperating expenditures of the eighth center as expansion costs.
B) If Vane is a cash basis taxpayer, it can deduct $10,415 in the year of payment.
C) If the new center represents a new business for Vane, it must capitalize the $10,415 preoperating expenditures.
D) None of the above is true.