In March of the Current Year,Marcus Began Investigating the Possibility

question 92

Multiple Choice

In March of the current year,Marcus began investigating the possibility of opening a specialty clothing store.From March through June,he spent $2,300 on a market survey,$2,700 in consulting fees to find the best location and $3,600 in professional fees setting up an accounting and inventory system.Although he had never run his own business before,on August 1 he opened his doors for business.What is the maximum amount of deduction for the current year attributable to these expenditures?

• A)$0
• B)$5,000
• C)$5,100
• D)$8,600

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Definitions:

Defined Contribution Plans

A type of retirement plan where the employer, employee, or both make contributions on a regular basis, but future benefits are based on the amount contributed and the performance of the investment options chosen by the participant.

Cash

A form of liquid asset that represents money in physical form, such as banknotes and coins.

Employer

An entity or individual that hires employees or workers.

Pension Expense

The cost recognized by an employer for maintaining a pension plan for its employees over a period.