Question

avier Corporation begins business on March 1, 2019. The corporation incurs start-up expenditures of $38,000. a....

avier Corporation begins business on March 1, 2019. The corporation incurs start-up expenditures of $38,000. a. If Xavier elects amortization under § 195, the total start-up expenditures that Xavier may deduct in 2019 is $ ??? . b. Assume the same facts except the start-up costs totaled $52,000. The total start-up expenditures that Xavier may deduct in 2019 is $???

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Answer #1

a. If Xavier elects amortization under § 195, the total start-up expenditures that Xavier may deduct in 2019 is $ ??? .

Deductible Amount 5,000.00
Amortization Amount [ { (38000-5000)/180} * 10] 1,833.00
Total Deduction 6,833.00

b. Assume the same facts except the start-up costs totaled $52,000. The total start-up expenditures that Xavier may deduct in 2019 is $???

Deductible Amount [ (5000- ( 52000-50000) ] 3,000.00
Amortization Amount [ { (52000-3000)/180} * 10] 2,722.00
Total Deduction 5,722.00
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