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:
a. she incurred start-up costs of $4,200. what amount of start-up costs immediately expensed
b. she incurred start-up costs of $45,500. what amount of start-up costs immediately expensed
c. she incurred start-up costs of $53,800.what amount of start-up costs immediately expensed .
d. she incurred start-up costs of $65,500.what 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)?

1) She incurred start-up costs of $2,500.

a) Amount of start up costs immediately expensed?

$2,500, computed as follows:

1Maximum immediate expense5000S 195(b)(1)(ii)

2Total start-up costs2500Given In

problem

3Phase-out threshold50000S 195(b)(1)(ii)

4Immediate expense phase-out0(2-3)

Allowable immediate expense2500Lessor of (2)or-(1)-(4)

2) She incurred start-up costs of $41,000

a) Amount of start up cost immediately expensed

$5000, computed as follows:

1Maximum immediate expense5000S 195(b)(1)(ii)

2Total start-up costs41000Given In

problem

3Phase-out threshold50000S 195(b)(1)(ii)

4Immediate expense phase-out0(2-3)

Allowable immediate expense5000Lessor of (2)or-(1)-(4)

3) She incurred start-up costs of $51,100.

a) Amount of start up cost immediately expensed

$3900, computed as follows:

1Maximum immediate expense5000S 195(b)(1)(ii)

2Total start-up costs51100Given In

problem

3Phase-out threshold50000S 195(b)(1)(ii)

4Immediate expense phase-out1100(2-3)

Allowable immediate expense3900Lessor of (2)or-(1)-(4)

4) She incurred start-up costs of $61,250.(Leave no answer blank. Enter zero if applicable.)

$0, computed as follows:

1Maximum immediate expense5000S 195(b)(1)(ii)

2Total start-up costs61250Given In

problem

3Phase-out threshold50000S 195(b)(1)(ii)

4Immediate expense phase-out11250(2-3)

Allowable immediate expense0Lessor of (2)or-(1)-(4)

5) 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)?

The answers would be the same if these were organizational expenditures instead ofstart-up costs.Note, however, that organizational expenditures only apply tocorporations and partnerships and do not apply to businesses organized as soleproprietorships

Explanation:

Hope you got it :)