When starting up a restaurant, what method of depreciation would you use for the start up small wares? I know replacement may be expensed in the year of purchase.
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Steve
I used Section 179 depreciation for small items when possible. -
Chief one of us is missing the point
As I understand it OP is talking about the purchase of such things as plates, silverware, and containers to drink from when the purchase is made before the place opens. My impression is that these would be "Startup Costs". If these costs do not exceed $50K then the first $5K may be expensed and the remainder may be written off over a period of not less than 180 months starting with the month in which the business opens. If these costs exceed $50K, the amount that may be expensed declines by one dollar for every dollar of excess expense. Doing things this way requires a special election on F4562 of the entities' first tax return. If the election is not made, then the full amount of "Startup Costs" gets amortized over not less than 180 months. My cite for this is the Master Tax Guide para 904. I am sure that TTB will contain more detail on how to make the election.
If the business goes out of business before the end of the 180 month or longer time, it may be possible to claim the remaining expense as a loss.
Speaking of the not less than rule, some day I am going to write the costs off over longer than I have to just to see if the IRS is paying attention.Comment
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