David Posted December 20, 2019 Report Share Posted December 20, 2019 New client brought in financial information for his new C Corp business. He incorporated in November 2017 and incurred organization costs and start-up costs in November through February. He actively began operating his business March 1, 2018. The client wants me to prepare his 2018 tax return which has a NOL. Even though the corporation was not active until 2018 isn't it still required to file a 2017 tax 1120? The 2017 1120 would show no revenue or expenses and would only report a balance sheet showing cash, org costs and start-up costs as assets and also report shareholders equity. Is my understanding correct? Thanks. Quote Link to comment Share on other sites More sharing options...
Lee B Posted December 21, 2019 Report Share Posted December 21, 2019 !. When did he file his SS-4 and obtain an EIN ? 2. What is the date on the IRS EIN letter and is the IRS expecting a tax return for 2017 ? 2 Quote Link to comment Share on other sites More sharing options...
Pacun Posted December 21, 2019 Report Share Posted December 21, 2019 If you want to have a calendar year, file 2017 and establish it. 2 Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted December 21, 2019 Report Share Posted December 21, 2019 1120 is required for any taxable year whether there are income and expenses or not. That should be spelled out in 1120 instructions. 3 Quote Link to comment Share on other sites More sharing options...
Taxalmancer Posted December 27, 2019 Report Share Posted December 27, 2019 I think what David is alluding to is there is no income nor expenses in 2017, only assets. Quote Link to comment Share on other sites More sharing options...
Max W Posted December 28, 2019 Report Share Posted December 28, 2019 The Org and startup costs, $5000 ea, are deducted in the year the business becomes operational. Anything over $5000 fro ea., is depreciated over 15 yrs starting with the month the biz begins operations. Anything over $50,000 is phased out. The reason you see new business locations open without much promotion and the Grand Opening taking place a week or 2 later is so the promotional cost is not considerd a startup cost and can be written off, rather than depreciated, or worse, phased out. 1 Quote Link to comment Share on other sites More sharing options...
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