What I have. TP already in business as a S-Corp. Goes to another State to set up same type of business only as a sole propiter. Incurred costs of buying building, renovating building, buying assets to be used in business, engineer fees, and interest on debt to buy and remodel. TP did this in 2012 opened doors 2013. Has yet to file his 2012 personal return. If you are looking at 2012 would you use $5000.00 start up and capital rest? what do you do with interest paid on note in 2012? For some reason I cannot get this through my thinker. Help and suggestions appreciated.
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So the TP is setting up a new business. Start up costs would be amortized under Sec. 195.
Why not?Friends double; family triple. Don't buy an audit for yourself. If someone has to go to jail make sure it is the client. Remember it is only taxes, nothing important. -
What type of startup costs did he incur? The ones mentioned did NOT appear to be startup costs. Most would be capitalized into the cost of the building and depreciated.
What were "the assets to be used in business"?Comment
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It appears the biggest cost I have found is the engineering fee of 20k and the interest of 37k. TP did some advance mailings 3k to test the waters. The rest appear to be the assets used in the business which I will set in 2013. TP also had to have an advance asbestos test 2k b4 he could start remodelling. I would assume that possibly the 3k mailings could be used in 2012 the rest to be handled in 2013.Comment
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I don't see how the engineering and asbestos costs, and interest escape capitalization as part of the building and depreciated. Remember, start-up costs must be deducted in the tax year the active business begins.Comment
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