Discussion:R & E Expenses
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| Revision as of 20:20, 5 April 2008 WPCPA (Talk | contribs) (Sec. 263. Capit) ← Previous diff |
Current revision Taxstudent (Talk | contribs) (WP, Did you pos) |
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| Consider Cost Segregation when Rental Income occurs.}} | Consider Cost Segregation when Rental Income occurs.}} | ||
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| + | {{ForumReplyPost|UserID=Taxstudent|Date=6 April 2008|Text=WP, | ||
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| + | Did you post in the right thread? | ||
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| + | Karen, | ||
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| + | Compare sections 195 and 174. Section 174 allows R&D expenses prior to the commencement of the active trade or business. The R&D credit requires an active trade or business, just like section 162.}} | ||
Current revision
Discussion Forum Index --> Advanced Tax Questions --> R & E Expenses
Discussion Forum Index --> Tax Questions --> R & E Expenses
Karendhill (talk|edits) said: | 1 April 2008 |
| My client is a start up partnership with only R & E expenses for the first year along with some office expense, organizational expense and website expense. My question is this: Can the R & E expenses be deducted in the first year, even though there was no income? Can the start up costs be deducted in the first year also? What about R & E credits? My understanding is that these credits can't be taken if there aren't any gross receipts yet. I don't have much experience with R & E expense. Thanks. | |
| 5 April 2008 | |
| Sec. 263. Capital expenditures
TITLE 26, Subtitle A, CHAPTER 1, Subchapter B, PART IX, Sec. 263. STATUTE (a) General rule No deduction shall be allowed for - (1) Any amount paid out for new buildings or for permanent improvements or betterments made to increase the value of any property or estate. This paragraph shall not apply to - The exemptions rarely fit to the usual acquisition. First, properly classify all expenses. Secnondly, propertly determine the "date placed into service" when all inspections were complete and the Certificate of Occupancy was issued. Then, you may well have a first year Net Operating Loss. From there you will have to detemine whether IRC 469 applies - Passive Activities (reverse recognition of gain or loss). Consider Cost Segregation when Rental Income occurs. | |
Taxstudent (talk|edits) said: | 6 April 2008 |
| WP,
Did you post in the right thread? Karen, Compare sections 195 and 174. Section 174 allows R&D expenses prior to the commencement of the active trade or business. The R&D credit requires an active trade or business, just like section 162. | |
