Which of the following statements is correct in connection with the investigatio

Question

Which of the following statements is correct in connection with the investigation of a business?

a. Regardless of whether the taxpayer is already engaged in the trade or business, the expenses must be capitalized and amortized.

b. If the taxpayer is not already engaged in the trade or business, the expenses incurred are deductible if the project is abandoned.

c. If the business is acquired, the expenses may be deducted immediately by a taxpayer engaged in a similar trade or business.

d. That business must be related to the taxpayer's present business for any expense ever to be deductible.

e. None of the above

Explanation / Answer

Answer is option C

If the business is acquired, the expenses may be deducted immediately by a taxpayer engaged in a similar trade or business. The expenses may be deducted regardless of whether the business being investigated is acquired.

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