Cambo Corporation, a calendar-year taxpayer, was formed in 2016 and incurred $60,000 in organizational expenditures.

Had the corporation made a proper election under Code Sec. 248, it would have been entitled to a $7,000 deduction in 2016.

However, on its 2016 tax return it erroneously claimed a $60,000 current deduction (i.e., it expensed the full amount in the year it was organized). Upon audit in 2019, the IRS disallowed the $60,000 deduction and also did not allow Cambo a $7,000 deduction. Cambo Corporation seeks your advice on this issue.

(See Reg. §1.248-1(c); Bay Sound Transportation Co., 1967-2 ustc J9641 (DC Texas 1967), affd in part and revd in part on other issues, 1969-1 ustc 99371, 410 R2d 505 (CA-5 1969).)