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CengageNOWv2, 1 term Printed Access Card for Hoffman/Young/Raabe/Maloney/Nellen's South-Western Federal Taxation 2018: Individual Income Taxes, 41st
41st Edition
ISBN: 9781337389518
Author: William H. Hoffman, James C. Young, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
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Question
Chapter 8, Problem 54P
To determine
Calculate the total deduction for startup expenditure.
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Students have asked these similar questions
Hawkeye Corporation starts business on April 2, 2023. The corporation reports startup expenditures of $64,000 all incurred in the prior year. Determine the total amount
that Hawkeye Corporation can elect to deduct in 2023.
O a. $0
O b. $3,200
O c. $4,267
O d. $7,950
1-13 Organizational Expenditures. G Corporation, an accrual basis taxpayer, incurred and paid $41,000 of qualifying organizational expenditures in 2021. Assuming G Corporation wishes to maximize its deductions, compute the maximum amount of organization costs that may be deducted for each of the following years if G Corporation adopts a calendar tax year.
For 2021, if G Corporation began business on September 1.
Calendar year 2022?
Calendar year 2026?
How would your answer to (a) change if the $41,000 had been paid in February 2022?
How would your answer to (a) change if G Corporation were a cash basis taxpayer and the $41,000 had been paid in February 2022?
How would your answer to (a) change if G Corporation had incurred $12,000 of the $41,000 qualified expenditures in January 2022.
Check my answer.
Cherry Corporation, a calendar year C corporation, is formed and begins business on April 1, 2020. In connection with its formation, Cherry incurs organizational expenditures of $54,000. Determine Cherry Corporation’s deduction for organizational expenditures for 2020
Section 248 allows Cherry corporation to take an immediate deduction of $5,000 for organizational expenditures and amortized the remaining balance over 180 months beginning with the month in which the business begins. Since Cherry Corp’s organization expenditures exceed $50,000 section 248 also requires an immediate dollar for dollar reduction for the amount over $50,000.
54,000-50,000=4,000 immediate phase out reduction, 5,000-4,000=1,000, remaining available immediate deduction. 54,000-1000=53,000/180month=294.44 There are 9 months of operation in 2020 =294.44*9=2649.96+1000=3649.96 total deduction or $3650
Chapter 8 Solutions
CengageNOWv2, 1 term Printed Access Card for Hoffman/Young/Raabe/Maloney/Nellen's South-Western Federal Taxation 2018: Individual Income Taxes, 41st
Ch. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - Prob. 4DQCh. 8 - Prob. 5DQCh. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - LO.2 Robert purchased and placed in service...Ch. 8 - LO.2 Jim owns a very large ranch. A large part of...Ch. 8 - Prob. 10DQ
Ch. 8 - Prob. 12DQCh. 8 - Discuss the definition of business income as it is...Ch. 8 - Prob. 14DQCh. 8 - Prob. 15DQCh. 8 - Prob. 16DQCh. 8 - Prob. 17DQCh. 8 - Prob. 18DQCh. 8 - Prob. 19DQCh. 8 - Prob. 20DQCh. 8 - Prob. 21CECh. 8 - Prob. 22CECh. 8 - Prob. 23CECh. 8 - Prob. 24CECh. 8 - Prob. 25CECh. 8 - Prob. 26CECh. 8 - Prob. 27CECh. 8 - Prob. 28CECh. 8 - Prob. 29CECh. 8 - Prob. 30CECh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Prob. 39PCh. 8 - Prob. 40PCh. 8 - Prob. 41PCh. 8 - Prob. 42PCh. 8 - Prob. 43PCh. 8 - Prob. 44PCh. 8 - Prob. 45PCh. 8 - Prob. 46PCh. 8 - Prob. 47PCh. 8 - Prob. 48PCh. 8 - Prob. 49PCh. 8 - Prob. 50PCh. 8 - Prob. 51PCh. 8 - LO.2, 5, 9 Jamie purchased 100,000 of new office...Ch. 8 - Prob. 53PCh. 8 - Prob. 54PCh. 8 - Prob. 55PCh. 8 - Prob. 56PCh. 8 - Prob. 57CPCh. 8 - Prob. 58CPCh. 8 - Prob. 1RPCh. 8 - Prob. 2RPCh. 8 - Prob. 3RPCh. 8 - Michael Sima, a sole proprietor craftsman,...Ch. 8 - Cox Construction, a company in its 10th year of...Ch. 8 - Stem Corp. bought a machine in February of year 7...Ch. 8 - Prob. 4CPACh. 8 - Data, Inc., purchased and placed in service a...Ch. 8 - Data, Inc., purchased and placed in service 5,000...Ch. 8 - Which statement below is correct? a. Real property...
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Similar questions
- Cherry Corporation, a calendar year C corporation, is formed and begins business on 6/1/2019. In connection with its formation, Cherry incurs organizational expenditures of $54,200. Round the per month amount to two decimal places. Round your final answer to the nearest dollar. Determine Cherry Corporation's deduction for organizational expenditures for 2019. $fill in the blank 1 Do not give answer in image and hand writingarrow_forwardCherry Corporation, a calendar-year C corporation, is formed and begins business on 8/1/2019. In connection with its formation, Cherry incurs organizational expenditures of $50,600. Round the per month amount to two decimal places. Round your final answer to the nearest dollar. Determine Cherry Corporation's deduction for organizational expenditures for 2019.arrow_forwardCherry Corporation, a calendar year C corporation, is formed and begins business on 8/1/2023. In connection with its formation, Cherry incurs organizational expenditures of $52,100. Round the per month amount to two decimal places. Round your final answer to the nearest dollar. Determine Cherry Corporation's deduction for organizational expenditures for the current year.arrow_forward
- kit Company borrows $6 million at 12% on January 1, 2019, specifically for the purpose of financing the construction of a building that is expected to take 18 montns to complete. Kit invests the total amount at 11 % until it makes payments for the construction project. During the first year of construction, kit incurs the following expenditures related to this construction project: 1. Compute the amount of interest expense Kit would capitalize related to the construction of the building. 2. Compute the amou1nt of interest revenue kit would recognize. 3. Assume that kit uses IFRS. what amount of interest would be capitalized related to the construction of the building?arrow_forwardIn 2019, Magenta Corporation paid compensation of 45,300 to the participants in a profit sharing plan. During 2019, Magenta Corporation contributed 13,200 to the plan. a. Calculate Magentas deductible amount for 2019. b. Calculate the amount of any contribution carryover from 2019.arrow_forward
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