Hammer Corp started business on July 1 20X4 and elected to a

Hammer Corp started business on July 1, 20X4, and elected to amortize its organizational expenses of $40,000. What is the maximum deduction that can be claimed for organizational expense on Hammer\'s 20X5 federal income tax return assuming that Hammer Corp expensed the additional allowable $5,000 in Year 20X4?

Solution

Solution: 2,333

Working:35,000 / 180 months * 12 mnths =2333 (organisational cost amortized over 180 months)