Answer to Question #43364 in Other Management for Seth Morgan
While she was a college student, Juliet worked in a bookstore located near campus. She thinks a bookstore located on the other side of campus would be successful. She incurs expenses of $18,000 (accounting fees, marketing survey, etc.) in exploring its business potential. Her parents have agreed to loan her the money required to start the business. What amount of these investigation costs can Juliet deduct if she
I. opens the business in July 2011 or
II. decides not to open the bookstore
If Juliet incurs expenses of $18,000 (accounting fees, marketing survey,etc.) in exploring its business potential and parents have agreed to loan her the money required to start the business, all these investigation costs can be deducted if she opens the business in July 2011 and no costs will be deducted, if she decides not to open the bookstore.
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