At the Election of the Taxpayer,a Current Deduction Is Allowed

question 39

True/False

At the election of the taxpayer,a current deduction is allowed for the lesser of actual business start-up expenditures incurred or $5,000 with the remainder capitalized and amortized over 180 months.A phaseout of the current deduction applies in the case of start-up expenditures exceeding $50,000.

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Definitions:

Price Appreciation

refers to an increase in the value of an asset over time, typically evidenced by a higher market price.

Securities

Financial instruments that represent ownership positions in publicly traded corporations (stock), creditor relationships with governmental bodies or corporations (bonds), or rights to ownership as represented by an option.

Dividends

Payments made by a corporation to its shareholder members, distributing a portion of the company’s earnings.

Expected Inflation Rates

The anticipated rate at which the general level of prices for goods and services will rise over a period of time.