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 be deemed insufficiently connected to a trade or business to justify a tax deduction at all.
Business Investigation Expense
Often, substantial time, effort, and out-of-pocket expenditures are required 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, transportation facilities, ...
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