Discussion:$5k Start up cost (but not below zero)?
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The Hammer (talk|edits) said: | 23 August 2007 |
| OK this may be a "stupid question", yet, its got me stumped and I figure "WE ALL" had to start somewhere. Scenario: Single member LLC performed HR consulting from home (2006) and incurred cost, for restaurant,---ovens, pots, pans, etc.. (2006) which opened doors in April/2007. My question can the purchase of equipm't create business loss (per tax year 2006) hence "start up cost". And forgive my infancy when it come to IRS Codes and legaleezzz! What does $5k start up cost (but not below zero) mean in ENGLISH. | |
| 23 August 2007 | |
| Please forgive my ignorance, but what has restaurant equipment have to do with his business of HR consulting?
Did he open a restaurant as a different business entity? The F/A that you listed are depreciable property and are depreciated when first placed into service....Start up costs are fees, etc. that would be considered start up in nature. What do you mean 5K start up costs but not below zero even mean? Are you asking about expensing the first 5K of start up costs in the first year? Like I said, please forgive my ignorance I don't think I am understanding your question exactly :) | |
| 23 August 2007 | |
| Perhaps the client opened his consulting business and bought the other items with the intention of cooking the books. | |
The Hammer (talk|edits) said: | 23 August 2007 |
| Sorry Sandy tried to keep it short and sweet. Yes, he did open a different business entity. To the best of my knowledge he stopped the consulting work and opened a restaurant, the only restaurant, to service a community of about 20-30k people. So, since April/2007 (official start up date) business, for him, has been exponentially well. Looking at your statement--got it depr prop-- and, yes, I am asking about expensing the first $5k of start up in the first year. What gets me is the "not below zero" according to Sec.195(A)(ii)? Appreciate the input. | |
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