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justin and Rachel want to open a restaurant. They contribute $3,000 each for a survey to locate an appropriate area for their restaurant and $2,000 each for a real estate agent to locate a suitable building for them to buy. Shortly after this, Rachel and Justin have a disagreement and Rachel walks away from the plan. Although she asks Justin to reimburse her, he refuses. Justin then continues the project on his own. He spends $6,000 for legal and accounting fees to set the business up and $9,000 for staff training. What are the tax consequences to Justin for these expenditures when the restaurant opens in July? For Rachel?

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Accounting Basics, Accounting

Category:- Accounting Basics
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