[Anonymous]

Hey all,

Has the allowable deduction for business start-up costs changed since the 2011 becker edition? As of 2011, the deduction was $5,000, and reduced after $50,000. I saw somewhere that it changed to $10,000. What is this amount in the 2012 becker edition? Any help is appreciated!!!

[Anonymous]

After a quick search, it looks like it has not changed from 2010 to 2011 tax years which is what your exam is based off.

From my 2011 tax year Quickfinder Binder:

Deducting/amortizing start-up costs. Taxpayers can elect to

deduct up to $5,000 (for 2011) of start-up costs and amortize the

remainder over 180 months, beginning with the tax year the business

begins. A taxpayer is deemed to have made the election so

an election statement attached to the return is not required (Reg.

§1.195-1). Instead, an affirmative election (on a timely filed return)

is required only when the taxpayer wants to forgo the deemed

election and capitalize start-up costs (in which case, no current

deduction or amortization is allowed).

The $5,000 immediate deduction allowance is reduced dollar for

dollar (but not below zero) by the taxpayer’s cumulative start-up

expenditures in excess of $50,000. Amounts that cannot be deducted

currently (either because they exceed $5,000 or because

of the $50,000 rule) are amortized over 180 months, beginning

with the month the business begins.

[Author]

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