Franchise Royalty and Admin fees

[AZ-Tax]

I have a client/LLC who purchased a Franchise in 2007. Are the Franchise Royalty fees and admin fees my clients had to pay and continue to pay a business related exp and if so how is deducted? Is it amortized, etc.

Thanks

Joe

[ChEAr$]

Any deduction

I have a client/LLC who purchased a Franchise in 2007. Are the Franchise Royalty fees and admin fees my clients had to pay and continue to pay a business related exp and if so how is deducted? Is it amortized, etc.

Thanks

Joe

depends on the nature of the payment. Any one time franchise fees at inception of
business get amortized. However royalty payments which depend on and are a percentage
of sales are current deductions; probably recurring administration fees also.

Read the franchise agreement then relate that to federal tax law.