New Business - Antiques

[zeros]

Client incurred expenses before the business was actually started. Buying antiques over a period of time and needing a place to store them for awhile. Had rent, heat, lights expense. Started incurring in 2014-15 and actually started the business in 2016. Would these be set-up expenses and how would you deduct them? Years?

[Kram BergGold]

Yes and no

The purchases of items for sale go into inventory. The other expenses are start up expenses. See TTB page 8-18 about start up costs.

[zeros]

Years of Depreciation?

The purchases of items for sale go into inventory. The other expenses are start up expenses. See TTB page 8-18 about start up costs.

How many years are start up costs depreciated over?

[New York Enrolled Agent]

How many years are start up costs depreciated over?

Take a look at IRC §195

[zeros]

Got The Answer

$5000.00 maximum over 15 years.

[Lion]

Is that right? I thought you could immediately expense up to $5,000 if you qualify and amortize the excess over 180 months.

[New York Enrolled Agent]

Is that right? I thought you could immediately expense up to $5,000 if you qualify and amortize the excess over 180 months.

Gee, Lion - you must have actually read §195(b)(1).

[Lion]

I read. But, I don't trust my memory!