IRS Tax Tip: Deducting Start-up Costs (IRC §195)

How and when business can deduct start-up costs depends on whether the expense is incurred before or after the business begins to operate, the IRS stated.Oowners should treat all eligible costs incurred before beginning to operate the business as capital expenditures that are part of their basis in the business and recovered through depreciation deductions. For costs paid or incurred after September 8, 2008, the business can deduct a limited amount of start-up and organizational costs and recover nondeductible costs over a 180-month period that starts with the month the business begins to operate active trade or as a business. ...