Previous Page: Publication 535 - Business Expenses - Environmental Cleanup Costs Next Page: Publication 535 - Business Expenses - Reforestation Costs Use   to find additional instances of index items.

Taxmap/pubs/p535-038.htm#TXMP38611d1f Business Start-Up and Organizational Costs

Business Start-Up and Organizational Costs

Business start-up and organizational costs are generally capital expenditures. Costs paid or incurred before October 23, 2004, must be capitalized unless an election is made to amortize them. You can choose to deduct up to $5,000 of business start-up and $5,000 of organizational costs, paid or incurred after October 22, 2004, as a current business expense. The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Any remaining costs must be amortized. For information about amortizing start-up and organizational costs, see chapter 9.

Start-up costs include any amounts paid or incurred in connection with creating an active trade or business or investigating the creation or acquisition of an active trade or business. Organizational costs include the costs of creating a corporation. For more information on start-up and organizational costs, see chapter 9.

Taxmap/pubs/p535-038.htm#TXMP0e99770c How to make the choice.

You choose to deduct the start-up or organizational costs by claiming the deduction on the income tax return (filed by the due date including extensions) for the taxable year in which the active trade or business begins.

Previous Page:  Publication 535 - Business Expenses - Environmental Cleanup Costs Next Page:  Publication 535 - Business Expenses - Reforestation Costs Use     to find additional instances of index items.