Question

Stanford owns and operates two dry cleaning businesses. He travels to Boston to discuss acquiring a restaurant. Later in the month, he travels to New York to discuss acquiring a bakery. Stanford does not acquire the restaurant but does purchase the bakery on November 1, 2020.

Stanford incurred the following expenses:

Total investigation costs related to the restaurant $41,000 Total investigation costs related to the bakery 52,100

If required, round any division to two decimal places and use in subsequent computation. Round your final answer to the nearest dollar.

What is the maximum amount Stanford can deduct in 2020 for investigation expenses?
$

Answer 1

Pgo Answer: The maximum amount deduction for investigation Expense = $3,447 Explanation As stanford didn't acquire the restaurant business. Therefore, no investigation sxpense is deductible . since, Bakery business has been acquired. Investigation Expenses will be deducted as follows: additional deaction phase out dollar to dollar above $50,000(2,00-50.00 - 2,100 phased out amount Amatization de remaining expense sfx/0-7:00)/18012 4547 for tax purpose. first year 5,000 2,900 Imxisimamant deduction for investigation Expense $3,447