Green Corporation begins business on July 10, 2015. The corporation has start-up expenditures of...

Question:

Green Corporation begins business on July 10, 2015. The corporation has start-up expenditures of $49,000. Determine the total amount that Green may deduct in 2015.

O     a.  $0

O     b.  $2,407

O     c.  $5,000

O     d.  $6,467

O     e.  $49,000

Deducting Startup Costs:

According to IRS Code Section 195, a business may deduct startup costs. During its first year, a company may deduct $5,000 in startup costs, reduced dollar for dollar by startup costs which exceed $50,000. Any startup costs exceeding $5,000 may be deducted over a 15 year period beginning in the month during which the business began operations.

Answer and Explanation: 1

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Since Green Corporation's start-up expenditures do not exceed the Code's limit of $50,000 as stated in Section 195, the corporation is entitled to an...

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Start-Up Budget: Definition & Example

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Chapter 3 / Lesson 12
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To begin operations, a company needs a start-up budget to identify how it will spend its capital and fund its initial expenses. Explore the definition and an example of a start-up budget and review other items to consider, such as licensing fees and employee expenses, to better understand how different types of businesses use start-up budgets.


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