network marketing

[Questionguy101]

Is the expense on network marketing starter kit and training cost considered startup expense and needed to be depreciated?

[erchess]

Maybe

I would say that is a facts and circumstances question and the answer is always imho somewhat debatable.

I have never had a client other than myself who tried network marketing but I have tried several companies. Most of the companies I tried had me on the phone talking to prospects at or before the time I got my kit. Assuming your client was in the same boat then I'd say there is a case for current deduction. If your client actually made money early on that was equal to or greater than the cost of the kit, imho that seals the deal. On the other hand one company advised me to wait for the kit to come, thoroughly familiarize myself with its contents, then attend some online and phone training and some face to face meetings before attempting to contact a client. This would have taken two weeks for someone prepared to put 40 hours a week into it. In that case the kit and the other expenses before the day I first contacted a potential customer were either organizational or start-up expenses.

[Lion]

Training

If the training was for a new career, it might not be deductible at all. Facts & circumstances.

[oceanlovin'ea]

Why would you have to wait until you talked to the first prospective client? Once you have signed up with a company to market whatever their product or service is, you are in business. You are "open for business" or taking clients from that point on. You might have to say to someone, I will get back to you with more info but you are ready to sell.
Most likely you are talking to someone about this new venture you are getting into...hoping they might be interested too.

Even if you go with your reasoning, start up expenses can be written off as an expense so it would not need to be depreciated.

Linda, EA