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“take over” the air conditioning business in her town. Beginning in
January, she started advertising her business (even though there was
snow on the ground), bought a supply of Freon, updated her vehicles and
bought new uniforms for her service technicians who were making house
Jane comes to you to determine how to optimize her
deductions in order to reduce her tax liability. What advice would you
give her as to the expenditures above (assuming they all took place in
the same year)? Be sure to also explain what may (or may not) be
capitalized and/or deducted.