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

question 52

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 2017, 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 2017.
• C)Expense $9,000 for 2017 and capitalize $14,000.
• D)Capitalize $23,000.
• E)None of the above.

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Definitions:

Physically Attractive

Pertaining to the aesthetic appeal of an individual's physical appearance to others.

Environmental Continuity

The consistency of certain environmental factors or influences over time, contributing to stability in development or behavior.

Low-birth Weight

A term used to describe babies who are born weighing less than 2,500 grams (5 pounds, 8 ounces).

Intelligence

refers to the ability to learn from experience, adapt to new situations, understand and handle abstract concepts, and use knowledge to manipulate one's environment.