Question

Emerald Corporation, a calendar year C corporation, was formed and began operations on April 1, 2018. The following expenses were incurred during the first tax year (April 1 through December 31, 2018) of operations. Expenses of temporary directors and of organizational meetings $27,000 Fee paid to the state of incorporation 1,000 Accounting services incident to organization 15,500 Legal services for drafting the corporate charter and bylaws 9,500 Expenses incident to the printing and sale of stock certificates 6,000 Assuming a § 248 election, what is the Emerald’s deduction for organizational expenditures for 2018?

Answer 1

Answer:

Emerald’s deduction for organizational expenditures is = $4550

Explanation:

given data

Expenses of temporary director and organizational meeting is = $27,000

Fee paid to state of incorporation = 1,000

Accounting services incident = 15,500

Legal services = 9,500

Expenses incident printing and sale = 6,000

to find out

Emerald deduction for organizational expenditures

solution

first we get here total Qualifying organizational expenditures that is

total Qualifying organizational expenditures  = $27,000 + $1,000 + $15,500 + $9,500

total Qualifying organizational expenditures  = $53000

and Immediate expensing will be as

Immediate expensing = $5000 - ($53000 - $50000)

Immediate expensing = $2000

so now we get here Emerald Corporation deduction under §248 for 2018 is

Amortization = $\frac{ 53000- 2000}{180}$ × 9  

here tax in year = 9 month

Amortization = $2550

Emerald’s deduction for organizational expenditures is = $2550 + $2000

Emerald’s deduction for organizational expenditures is = $4550