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Problem
#276969

Taxation: Cardinal LLC, amortization of startup expenses, capitalization of costs

Cardinal, LLC incurred $20,000 of startup expenses, $3,000 of organizational costs, and paid $10,000 in transfer taxes to change the title (ownership) of a building contributed by one of the LLC's members. Which of the following statements is correct regarding these three amounts?

Cardinal can deduct $5,000 of the startup expenses.
Cardinal can amortize $15,000 of the startup expenses over 180 months.
Cardinal may deduct the full amount of the organizational costs.
Cardinal can capitalize the $10,000 tax paid as a part of the depreciable basis of the building.
All of the above statements are true.

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