Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Candlewood LLC began its business on December 1, 2020; and it uses a calendar tax and an accounting year. Candlewood incurred $8,300 in legal fees

image text in transcribed
Candlewood LLC began its business on December 1, 2020; and it uses a calendar tax and an accounting year. Candlewood incurred $8,300 in legal fees for drafting the LLC's operating agreement and $4,150 in accounting fees for tax advice of an organizational nature, for a total of $12,450 of organizational costs. Candlewood also incurred $9,800 of preopening advertising expenses and $43,700 of salaries and training costs for new employees before opening for business, for a total of $53,500 of startup costs. The LLC desires to take the largest deduction available for these costs. If required, round any division to six decimal places and use in subsequent computations. Round your final answers to the nearest dollar. Compute Candlewood's deductions for the first year of its operations for a. Organizational expenses: 4,900 x b. Startup expenses: Feedback Che My Wor In its initial stages, a LLC incurs expenses related to some or all of the following activities forming the LLC (organizational costs), starting business operations (startup costs), admitting members to the Log marketing and selling LLC units to prospective members (syndication costs), and acquiring assets. The LLC may elect to deduct up to $5,000 of such expenditures in the year in which it begins business. However, this amount is subject to limitations

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

10. What is meant by a feed rate?

Answered: 1 week ago