Would appreciate a bit of help on this startup issue--restuarant incurrs rent/utility --equiptment purchase etc, expense before opening the doors--accrue to "startup expense" or current deduction on 1st tax return? Business organization date in 2011//business open date in 2012.
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Operating-type expenses prior to the business being open for business can qualify as start-up expenses when the business opens. Depreciable assets begin depreciation when placed in service in 2012. -
Startup
Thank you to Lion for your response--sometimes the simpler questions throw me for a loop --overthinking perhaps--
Appreciate itComment
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That was a really simplified answer, but it seemed to be the distinction you were looking for. As well as the start-up expenses that, within limits, can be deducted when the business begins; you also have organizational costs, the legal stuff. But, that didn't seem to be what you needed to know.
I think of it as -- the expenses that would be ordinary operating expenses when the business opens, rent, utilities, supplies, can qualify as start-up expenses and finally be deducted &/or amortized according to the rules when the business opens. Capital expenses that would be depreciable if the business were open get to be depreciated when placed in service/opening day. And, from opening day you have your usual expenses to deduct.
In your case, all those items will show up on 2012 returns and not 2011.Comment
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