TTB 8-19 Business Never Starts or Does it?

[AZ-Tax]

Assume on 8/6/09 business is launched. Most bus related exps for 2009 are paid out after launch date. Business has NO revenues in 2009 (calendar yr). Did the business start? If yes, then I would assume all start up bus related exps paid prior to lauch date may qualify as start up exps, correct?

[taxea]

Assume on 8/6/09 business is launched. Most bus related exps for 2009 are paid out after launch date. Business has NO revenues in 2009 (calendar yr). Did the business start? If yes, then I would assume all start up bus related exps paid prior to lauch date may qualify as start up exps, correct?

Yes, however, I would take the startup expenses in the year the business earns income unless it was a storefront and made no money from the opening date to the end of the year.

[ChEAr$]

Assume on 8/6/09 business is launched. Most bus related exps for 2009 are paid out after launch date. Business has NO revenues in 2009 (calendar yr). Did the business start? If yes, then I would assume all start up bus related exps paid prior to lauch date may qualify as start up exps, correct?

Whether the business actually started is a question of facts and circumstances; good 'old F&C!

You need to consult with client to determine his efforts and activities which would have perfected the launch of the business. it may just be that he wasn't serious about it, maybe didn't even get a business license (?), and gave up before he began. In that case, capital loss.

[Kram BergGold]

Disagree with taxea

Either the start up expenses are deducted in year paid under the $10,000 rule or they are amortized over 180 months. You can't just decide to deduct them all in the year after they were paid.

[Lion]

Start Up

Thought you deducted start-up expenses in the year the business opened.

[Carlos]

Lion is correct

Start up and organizational costs are either deducted or amortized when business opens.