Question

Question 7
An example of an expense not allowed as a deduction under Code Sec. 162(a) would be:
Question 7 options:

1) a speeding ticket.

2) an expense incurred while operating an illegal gambling business.

3) a government imposed penalty.

4) both a and c.

5) all of the above.

Question 8
During the current year, a calendar year corporation incurred $52,000 of research and experimental expenditures. The corporation elects to capitalize and amortize the costs over 60 months. If the corporation first realizes benefits from the research and experimental expenditures on November 1 of the current year, its R&E deduction will equal:
Question 8 options:

1) $4,633

2) $3,544

3) $2,217

4) $1,733

Answer 1

Question 7

Expense not allowed as deduction under code Sec. 162(a) includes speeding ticket and penalty imposed by government

Therefore the correct answer is

Question 8

Amortized cost per month = 52,000/60 =866.66

As the corporation realises benefits from the research and experimental expenditure from 1st November therefore R&D deduction will be available for November and December month.

Therefore total R&D deduction will be = 866.66*2 = 1,733

Therefore the correct answer is 4