Insurance business-no income

[JenMO]

Man took insurance test in late fall, passed, rented office, made contacts, but sold no insurance until Jan 2010. Would his expenses be starting up costs - amoritized- or Sch C losses?

[spencer]

I think

you could call this one either way ( & you-all can correct me). I'd do the C. He's making the effort. He's proceeding in a businesslike manner. Just because he didn't sell anything doesn' mean he wasn't open as a business.

[taxea]

I do agree with ESpencer..,he is engaged in a business for profit, however, the other side of that is the possibility that he will not make a profit in the required time which may cause the IRS to give him (and you) a headache proving that he was, in fact, in business for profit and not just as a hobby.
so if you wait until 2010 when there is income and use the,appropriate expenses in 2009, as startup costs, he will have one more year to make a profit.