| Yes, you can deduct your initial "startup expenses or organization costs" along with any depreciation for any assets that have been purchased for your business. The fact that you are not going to have any revenue makes no difference as far as the IRS is concerned!
Per the IRS, "Amortization is a method of recovering (deducting) certain startup or organization costs over a fixed period of time. It is similar to the straight line method of depreciation. For costs paid or incurred after September 8, 2008, you can deduct a maximum of $5,000 of start-up and the balance of the costs that are not deducted currently can be amortized ratably over a 180-month period."
The amortization period starts with the month you begin operating your active trade or business. You are not required to attach a statement to make this election. Furthermore, once an election has been made, this election is irrevocable.
There is no Red Flag associated with deducting any of the above startup expenses or electing to depreciate your assets that you have used for your active trade or business even if your business has no income in the first year of the business.
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