Iris, a Calendar Year Cash Basis Taxpayer, Owns and Operates

question 56

Multiple Choice

Iris, a calendar year cash basis taxpayer, owns and operates several TV rental outlets in Florida and wants to expand to other states.During 2019, she spends $14,000 to investigate TV rental stores in South Carolina and $9,000 to investigate TV rental stores in Georgia.She acquires the South Carolina operations but not the outlets in Georgia.As to these expenses, Iris should:

• A)Capitalize $14,000 and not deduct $9,000.
• B)Expense $23,000 for 2019.
• C)Expense $9,000 for 2019 and capitalize $14,000.
• D)Capitalize $23,000.
• E)None of these.

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