Jasmine started a new business in the current year. She incurred $26,000 of start-up costs. How much of the start-up costs can be immediately deducted (excluding amounts amortized over 180 months)for the year?
A)$0
B)$2,500
C)$5,000
D)$26,000
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

The maximum amount of start-up costs that can be immediately deducted for the year is $5,000. This is per IRS rules that state that businesses can choose to deduct up to $5,000 of start-up costs in the year that the business begins. Any remaining start-up costs can be amortized (deducted over time) over a period of 180 months. Therefore, choice C is the best answer.

Jasmine Started a New Business in the Current Year