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Bethany incurred $20,000 in research and experimental costs for developing a specialized product during July of year 1. Bethany went through a lot of trouble and spent $10,000 in legal fees to receive a patent for the product in August of year 3.
a. What amount of research and experimental expenses for year 1, year 2, and year 3 may Bethany deduct if she elects to amortize the expenses over 60 months?
b. How much patent amortization expense would Bethany deduct in year 3 assuming she elected to amortize the research and experimental costs over 60 months?
c. If Bethany chose to capitalize but not amortize the research and experimental expenses she incurred in year 1, how much patent amortization expense would Bethany deduct in year 3?
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