(a) Sybil is a florist who operates a shop in Daly City. She is considering opening a restaurant in downtown Oakland. In 2021, she spent $51,200 on market research to determine demand for a restaurant in downtown Oakland. Based on the research, she decides to open the shop on March 1, 2021. May she deduct the $51,200? If so, how much may she deduct in 2021? (b) Sybil is also considering opening a flower shop in downtown San Francisco. She spent $52,000 on market research to determine demand for flowers in downtown San Francisco. Based on the research, she decides not to open the flower shop. May she deduct the $52,000? If so, how much may she deduct in 2021?

(a) Sybil is a florist who operates a shop in Daly City. She is considering opening a restaurant in downtown Oakland. In 2021, she spent $51,200 on market research to determine demand for a restaurant in downtown Oakland. Based on the research, she decides to open the shop on March 1, 2021. May she deduct the $51,200? If so, how much may she deduct in 2021? (b) Sybil is also considering opening a flower shop in downtown San Francisco. She spent $52,000 on market research to determine demand for flowers in downtown San Francisco. Based on the research, she decides not to open the flower shop. May she deduct the $52,000? If so, how much may she deduct in 2021?

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter17: Business Tax Credits And The Alternative Minimum Tax

Section: Chapter Questions

Problem 24P

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