Should Flatirons capitalize or deduct the costs of cleaning up the environmental contamination to the groundwater

• Use the §§351 and 1239 rules to compute the gain/loss recognized due to the capital contributions by Robert and Elizabeth.
• How are Elizabeth’s services treated by Flatirons for federal income tax purposes?
• Compute the corporation’s basis in the assets that it received from Robert.
II
• The deduction for expenses of an office in the home are found in §280H.
• Robert might also be able to deduct some §162 travel expenses.
• How would Flatirons and the employees be treated if an “accountable plan” were used for the expense reimbursements? A “nonaccountable plan”?
III
• Should Flatirons capitalize or deduct the costs of cleaning up the environmental contamination to the groundwater?
• Does the Flatirons clean-up operation put the land to a new or different use, extend the property’s useful life, or increase its value?