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Business Investigation Expenditures. During January and February of the current year, Big Bang LLC incurs $3,000 in travel, feasibility studies, and legal expenses to investigate the feasibility of opening a new entertainment gallery in one of the new suburban malls in town.Big Bang already owns two other entertainment galleries in other malls in town.
a. what is the proper tax treatment of these expenses if Big Bang decides not to open the next gallery?
b. what is the proper tax treatment of these expenses if Big Bang decides to open the new gallery?
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