P incurred significant expenses to investigate the possibility of opening a Dowell’s Hamburgers franchise in Tokyo, Japan. Her expenditures included hiring a local firm to perform a feasibility study, travel, and accounting and legal expenses. Her 2021 expenditures total $25,000. With respect to this amount:

1. Assuming this was P’s first attempt at opening a business of her own, how much may she deduct in 2021 if she decides not to acquire the franchise?

2. Assuming this was P’s first attempt at opening a business of her own, how much may she deduct in 2021 if she decides to acquire the franchise?

3. Assuming P was already in the fast-food business (she owns a Dowell’s franchise in Toledo, Ohio), how much may she deduct in 2021 to acquire the franchise?

Answer rating: 100% (QA)

any amount spent on account of research and development ... View the full answer