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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Definitions:

Low-Risk Drinking

Consuming alcohol in a manner that minimizes the risk of harmful consequences or behaviors, typically adhering to guidelines based on gender and body size.

Weekly Basis

Referring to something that occurs every week.

Crystal Meth

A highly addictive, illegal stimulant drug that has severe physical and psychological effects on the user.

Man-Made Drug

Synthetic substances created through chemical processes to mimic or alter natural effects on the body.