Exercise 14-5 (Algorithmic) (LO. 3) Candlewood LLC began its business on July 1, 2020; and it...
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Exercise 14-5 (Algorithmic) (LO. 3) Candlewood LLC began its business on July 1, 2020; and it uses a calendar tax and an accounting year. Candlewood incurred $12,500 in legal fees for drafting the LLC's operating agreement and $6,250 in accounting fees for tax advice of an organizational nature, for a total of $18,750 of organizational costs. Candlewood also incurred $11,800 of preopening advertising expenses and $39,200 of salaries and training costs for new employees before opening for business, for a total of $51,000 of startup costs. The LLC desires to take the largest deduction available for these costs. If required, round any division to six decimal places and use in subsequent computations. Round your final answers to the nearest dollar. Compute Candlewood's deductions for the first year of its operations for: a. Organizational expenses: $ b. Startup expenses: $ Exercise 14-5 (Algorithmic) (LO. 3) Candlewood LLC began its business on July 1, 2020; and it uses a calendar tax and an accounting year. Candlewood incurred $12,500 in legal fees for drafting the LLC's operating agreement and $6,250 in accounting fees for tax advice of an organizational nature, for a total of $18,750 of organizational costs. Candlewood also incurred $11,800 of preopening advertising expenses and $39,200 of salaries and training costs for new employees before opening for business, for a total of $51,000 of startup costs. The LLC desires to take the largest deduction available for these costs. If required, round any division to six decimal places and use in subsequent computations. Round your final answers to the nearest dollar. Compute Candlewood's deductions for the first year of its operations for: a. Organizational expenses: $ b. Startup expenses: $
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Solution a The corporation can elect to deduct 5000 ... View the full answer
Related Book For
South Western Federal Taxation 2018 Essentials Of Taxation Individuals And Business Entities
ISBN: 9781337386173
21st Edition
Authors: William A. Raabe, James C. Young, Annette Nellen, David M. Maloney
Posted Date:
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