Do you have to attach a written election to expense start up costs?
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The $5,000 expense for start-up costs is not an election. The only election is if you want to amortize expenses in excess of $5,000 over 180 months. The organizational and start-up costs amortization election statement in TTB, page 24-10 says not to use that worksheet if no amortization is taken because costs are $5,000 or less. -
OK.. I must had misunderstood. I thought you had to elect to expense the $5,000. Thanks for the help.Originally posted by Bees KneesComment
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You did not misunderstand
You did not misunderstand. You must make a written election under Section 195 to expense up to $5000 of startup expenses and up to $5000 of organizational costs, with the balance amortized over 180 months. I suppose you can get by without a worksheet, but you must make this election no later than the filing date for the year business operations commence. If you don't make the election, you must capitalize all such costs and amortize none.Comment
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I agree. I miss-read the code. Both the $5,000 expense and 180-month amortization period are all the same election. What you can't do is elect the amortization instead of the $5,000 expense. The $5,000 expense is mandatory if you want to amortize the excess expenses.Comment
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In other words, even though it says not to, I would use the election worksheet in TTB, page 24-10 and attach that to the return even if expenses are $5,000 or less.Comment
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what about e-file
if you are e-filing a 1065 with such election how do you attach a statement?Comment
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Your software probably has some kind of election statement for this, or some generic statement where you can type in the words to create your own election statement.Comment
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