My client had an LLC registered in MA. In 2005 he changed it to NY State. This cost him $4,000. Is this a deduction? If not, how is it amortized or depreciated?
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Under both Corporation Organizational Costs, and Partnership Organizational Costs listed in TTB page 8-17, State filing fees are listed as costs that need to be capitalized, eligible for the expense and amortization elections. That is for corporations and partnerships. If this is a single member LLC treated as a sole proprietorship for federal tax purposes, there is no requirement that organizational costs fall under this rule, unless the LLC fees are a part of start-up expenses. Even if it were subject to the capitalization rules as an organizational cost, you could deduct it as a current expense since it is below the $5,000 rule. -
Thanks Bees
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