Why Can Business Investigation Expenditures Be Deducted Currently by a Taxpayer

question 39

Essay

Why can business investigation expenditures be deducted currently by a taxpayer who is engaged in a line of business similar to the one being investigated,while the same costs must be capitalized and amortized to be deductible by a taxpayer who is not engaged in a similar business?

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Definitions:

Identifiable Net Assets Method

An accounting technique used to value a company by identifying and valuing its tangible and intangible assets separately from goodwill.

IFRS

International Financial Reporting Standards are globally accepted standards for accounting, aiming at bringing transparency, accountability, and efficiency to financial markets around the world.

Bargain Purchase

An acquisition where the purchase price is significantly lower than the fair market value of the acquired assets.

Net Book Value

The value of an asset after accounting for depreciation or amortization, as displayed on a company’s balance sheet.