In this chapter, the tax treatment of the costs associated with deciding which business to acquire will be discussed. Depending on the circumstances, these business investigation expenditures may be currently deductible, or be capitalized and amortized over a period of time or deemed insufficiently connected to a trade or business to justify a tax deduction at all.
Business Investigation Expense
Often the acquisition of a business requires substantial time, effort, and out-of-pocket expenditures to determine whether to acquire a business and if so, which business to acquire. Business investigation costs include expenses incurred for the analysis or survey of potential markets, products, labor supply, ...
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