Question 8
Garth owns and operates several offroad Jeep rental services in Montana and wants to expand to other states. During the current year, he spends \$12,000 to investigate offroad Jeep rental services in
Colorado and \$6,000 to investigate offroad Jeep rental services in Utah. He acquires the Colorado operations but not the outlets in Utah. As to these expenses, Garth should:
a. Capitalize \$12,000 and not deduct \$6,000.
b. Expense \$18,000 in the current year.
c. Expense \$6,000 in the current year and capitalize \$12,000.
d. Capitalize \$18,000.