Nicole organized a new corporation.The corporation began business on April 1 of year 1.She made the following expenditures associated with getting the corporation started:
Expense ............................. Date ................... Amount
Attorney fees for articles .......... February 10 ......... $32,000
of incorporation
March 1 - March 30 wages ....... March 30 ................ $4,500
March 1 - March 30 rent ........ March 30 ................ $2,000
Stock issuance costs .............. April 1 ................... $20,000
April 1 - May 30 wages .... May 30 .................. $12,000
a. What is the total amount of the start-up costs and organizational expenditures for Nicole's corporation?
b. What amount of the start-up costs and organizational expenditures may the corporation immediately expense in year 1?
c. What amount can the corporation deduct as amortization expense for the organizational expenditures and for the start-up costs for year 1 (not including the amount it immediately expensed)?
d. What would be the allowable organizational expenditures, including immediate expensing and amortization, if Ingrid started a sole proprietorship instead?