Desi Corporation Incurs $5,000 in Travel,market Surveys,and Legal Expenses to Investigate

question 70

Essay

Desi Corporation incurs $5,000 in travel,market surveys,and legal expenses to investigate the feasibility of opening a new coffee house in one of the new suburban malls in town.Desi already owns a similar coffee house downtown.
a.What is the proper tax treatment of these expenses if Desi decides not to open the new coffee house?
b.What is the proper tax treatment of these expenses if Desi decides to open the new coffee house?
c.Assume that Desi Corp is currently in the cleaning services business and incurs the noted expenses because it is considering opening a coffee house.Reconsider your responses to parts a and b.

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Definitions:

Skill Variety

The range of skills and tasks required to carry out a job, promoting job satisfaction and motivation.

Wide Range

Referring to a broad spectrum or variety of something, from one end to another.

Gender

A social construct that encompasses a range of identities, expressions, and roles associated with being male, female, or non-binary, going beyond biological differences.

Job Crafting

The process by which employees proactively modify their jobs in ways that can improve their work experience and performance.