While She Was a College Student, Angel Lived by a Bookstore

question 26

Essay

While she was a college student, Angel lived by a bookstore located near campus. She thinks a bookstore located on the other side of campus would be successful. She incurs expenses of $42,800 (legal fees, accounting fees, marketing survey, etc.) in exploring its business potential. Her parents have agreed to loan her the money required to start the business. What amount of these investigation costs can Angel deduct if:
a.She opens the bookstore on August 1, 2017.
b.She decides not to open the bookstore.

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Definitions:

Exclusive Right

A privilege or entitlement granted to an individual or entity to be the sole provider or beneficiary of a specific service, product, or activity.

Real Estate Broker

A licensed individual or firm that acts as an intermediary between sellers and buyers of real estate, assisting in the negotiation and sale process.

Commission

A fee paid to an agent or employee for transacting a piece of business or performing a service, often calculated as a percentage of sales.

Recording Statutes

Laws that govern the recording of documents (such as deeds or mortgages) to provide notice of their content and to establish legal priority.