startup expenditures 455441

Aug 29, 2021 | Uncategorized

Martha was considering starting a new business. During her preliminary investigations, she incurred the following expenditures:

Salaries $22,000
Travel 18,000
Professional fees 13,000
Interest on a short term note 4,000

Martha begins the business on July 1 of the current year.

a. Indicate whether the following expenditures qualify or do not qualify as startup costs.

‘ Salaries Select Qualifies as startup cost Does not qualify as startup cost Item 1
‘ Travel Select Qualifies as startup cost Does not qualify as startup cost Item 2
‘ Professional fees Select Qualifies as startup cost Does not qualify as startup cost Item 3
‘ Interest on a short term note Select Qualifies as startup cost Does not qualify as startup cost Item 4

b. In your calculations, round any division to 2 decimal places. Round your final answer to the nearest dollar. If Martha elects A?§ 195 treatment, the startup expenditure deduction for the current year is $ .