Question

P incurred incorporation costs of $10,000 to incorporate a new corporation, effective January 1 of the current year, and chose December 31 as its first year end. What is the maximum amount that can be deducted in computing income for the current year?

Note: Do not place a minus sign in front of the amount.

$

Answer 1

Answeg year so, initial Given page-01 Р incurred incorporation cost - $10000 Maximum amount that can be deducted in computing income for the Carstent The inwrporation expenses is less than 50000 top up dedution is $ 5000. The rest of the incorporation costs oure absorbed and amortised in 180 mon this equal installment starting from the day of incorporation. so, monthly amortisation amount is 5000 180 $27.78 The first I cursent year ( complete 12 months) marimum amount of incorporatton costs deduction is = $ 5000+ (27.78x12) $ 5000 + 333.36 one $ 5333. 36 0715333