helow Posted March 17, 2008 Report Share Posted March 17, 2008 Where do you deduct start up costs. Thanks Jeff Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted March 17, 2008 Report Share Posted March 17, 2008 Are you asking about a schedule C? Are you taking the §195 election to expense in the first year of business? Tom Lodi, CA Quote Link to comment Share on other sites More sharing options...
helow Posted March 17, 2008 Author Report Share Posted March 17, 2008 TP has started an LLC for his trucking business. He did not make any money but wants to claim startup cose and licenses. All of his expenses are less than $4K. I think he can either amortize them over 60 month or deduct up to $5K. I just want to make sure that he can claim these expenses even though he had zero sales. The truck is idle in garage! My other question is that: does he have to file form 1065. That is what the IRS said to him when he received the EIN. Thanks Jeff Quote Link to comment Share on other sites More sharing options...
indyscott Posted March 17, 2008 Report Share Posted March 17, 2008 Up to $5000 of startup costs can be expensed by making an election on PT VI of 4562, and attaching a separate statement detailing the costs. It is to be done in the year that the business activity begins. Sounds to me like the business hasn't begun, and s/not deduct those $ in 07. The return to file is Sch C on 1040. A single member LLC is a "disregarded entity" by IRS. Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted March 17, 2008 Report Share Posted March 17, 2008 I agree with Indyscott that the taxpayer should not deduct in 07. No business activity looks like business not started yet. Take them in the year he starts business. Look at his LLC election. He should have checked the box to be disregarded if he is the sole member of the LLC. Tom Lodi, CA Quote Link to comment Share on other sites More sharing options...
helow Posted March 17, 2008 Author Report Share Posted March 17, 2008 Thanks all. I appreciate your responses. Jeff Quote Link to comment Share on other sites More sharing options...
OldJack Posted March 17, 2008 Report Share Posted March 17, 2008 >>Take them in the year he starts business.<< True, but take them starting in the month that he starts business. Quote Link to comment Share on other sites More sharing options...
diligentbiz Posted March 27, 2008 Report Share Posted March 27, 2008 I amortize and it's never been questioned. (Schedule E people - Expenses to search for new real estate property for rentals can also be amortized.) Quote Link to comment Share on other sites More sharing options...
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