Reference no: EM132911010
Dino and Virgil operated a service station for many years as a partnership. In the current year, they purchased a vacant service station and land at a better location and moved their business to the new location.
As a result of the move, Dino and Virgil incurred the following related expenses:
Cost of land and building at new location $150,000
Cost to move and install the existing machinery, equipment, etc., from old location to new location 10,000
Environmental costs to clean up old location contamination 35,000
Problem 1: How much of the expenses shown above can Dino and Virgil currently deduct (not considering depreciation or Sec. 179 applicability) as an expense on their current-year partnership income tax return?
Option 1: $0
Option 2: $10,000
Option 3: $35,000
Option 4: $45,000
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