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The Tax Aspects of Acquiring a Business by W. Eugene Seago

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Chapter 6

Business Investigation Costs

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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