1) The following expenses are incurred by Robin, Inc. when it is organized on Ju
ID: 2549631 • Letter: 1
Question
1) The following expenses are incurred by Robin, Inc. when it is organized on July 1: Attorney fees to draft charter Underwriter fees for stock sale Transfer cost for property contributed to the corporation for stock Costs of organizational meetings before beginning business Costs of directors' meetings after beginning busines $20,000 10,000 4,000 5,000 8,000 Robin commenced business on September 8. What is the maximum amount of organizational expenditures that can be deducted by the corporation for its first tax year ending December 31?Explanation / Answer
Startup Cost or Organizational Expenditure = Attorney Fees to draft charter + Underwriter fee for stock sale + Cost of Organizational meetings before begining of business
= $ 20,000 + $ 10,000 + $ 5000
=$ 35,000
the Other two that is Cost of Director meetingd after begining business nad Transfer cost for property contributed to the corporation stock will be not treted as start up cost and allowed as normal buniess course.
So as per tax rules corporation can duduct full $ 35,000 organizational expenditure for the first tax year ending December 31, Beacuse it is less than $ 50,000 limit if it is more than that then the first year deduction will be $ 5000 only and balance will be availble in 180 month equally
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