Property Acq & cost rec:

8-11

Juliette formed a new business to sell sporting goods this year. The business opened its doors to customers on June 1. Determine the amount of start-up costs Juliette can immediately expense (not including the portion of the expenditures that are amortized over 180 months) this year in the following alternative scenarios:

Note: Leave no answer blank. Enter zero if applicable.

a. She incurred start-up costs of $3,100. Amount of start-up costs immediately expensed?

b. She incurred start-up costs of $42,500. Amount of start-up costs immediately expensed?

c. She incurred start-up costs of $52,000. Amount of start-up costs immediately expensed?

d. She incurred start-up costs of $62,750. Amount of start-up costs immediately expensed?

e. How would you answer parts (a) through (d) if she formed a partnership or a corporation and she incurred the same amount of organizational expenditures rather than start-up costs (how much of the organizational expenditures would be immediately deductible)?

costs incurred: Amount:

$3,100

$42,500

$52,000

$62,750