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

question 26

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 2018, 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 2018.
• C) Expense $9,000 for 2018 and capitalize $14,000.
• D) Capitalize $23,000.
• E) None of the above.

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Definitions:

Ingroup

A social group to which a person psychologically identifies as being a member, influencing their social identity and attitudes towards outgroups.

Verbal Behavior

The aspect of human behavior that involves the expression of thoughts, feelings, and intentions through spoken or written language.

Social Scripts

Predetermined, stereotyped sequences of actions that help individuals know what to expect in social situations.

Scapegoating

The practice of unfairly blaming someone or a group for problems, often to deflect attention or responsibility away from oneself.