[Spartans92]

Im sorry guys for starting this thread when I already posted on the NINJA REG study group. But I am really in need to find out the reason for this SIM since my exam is in a few days and this weekend will be my last full day of studying.

My question is for the “other deduction” line 26 the answer states that start up costs of 60000 exceeds the 50k limit, hence, all are amortized over 180 months then x 12 months. I get the first part. Im confused on the 12 months.

60,000 / 180 x 12 = 4,000. But since the question explicitly states the company started in november and the year ended december. Why are we multiplying by 12 and not 2?

Thanks!

BEC - 76
REG- 67, 85
AUD-63, 74, 80!!
FAR-65, 62, 57, 79

3 down 1 more to go. BEC is on the Line 🙁

BEC- PASS

[Paul]

Hey Spartans92,

Did you find the answer to your question?

Does this question state that the costs were paid?

I am thinking:

The deduction happens when accrued if paid within 2.5 month of the close of the corp tax year and if they are not then you can't deduct.

BEC 10/29/16
FAR 11/26/16
REG TBA
AUD TBA

[Spartans92]

The question was asking about year 5 deduction. I misread and thought it was asking about year 4. So thats why we take the whole year (12 months). :/ LOL

BEC - 76
REG- 67, 85
AUD-63, 74, 80!!
FAR-65, 62, 57, 79

3 down 1 more to go. BEC is on the Line 🙁

BEC- PASS

[Nikki]

Are Organizational costs and start up costs treated differently? I thought both were 5,000 expense amortized over 180 months with a 50,000 cap.

AUD - Passed

BEC - Passed

REG - Passed

FAR - Passed

Never give up!

[Author]

Replies