start up expenses

Jdelude13 · #1 (**permalink**) 08-09-2010, 04:30 PM

Hello!

I recently invested $55,000 to start a travel business. Can you tell me how do I write off my initial start up cost?

Jeannette

TaxGuru · #2 (**permalink**) 08-10-2010, 07:25 PM

Well, can you please provide me with a breakdown of the categories involved in your Start up expenses? The categories would be Office Equipment and Furniture, Rental Deposit, Improvements and Organization Costs.

Did you incur all of these expenses prior to the opening of the business?

Jdelude13 · #3 (**permalink**) 08-10-2010, 09:27 PM

Quote:

Originally Posted by TaxGuru

Well, can you please provide me with a breakdown of the categories involved in your Start up expenses? The categories would be Office Equipment and Furniture, Rental Deposit, Improvements and Organization Costs.

Did you incur all of these expenses prior to the opening of the business?

Actually I purchased a vacation property that I am going to be reselling to potential vacationers.

TaxGuru · #4 (**permalink**) 08-12-2010, 03:56 PM

Oh! I see, in this case the costs are capitalized and offset at the time you sell the property.

All the acquistion related costs are capitalized and considered part of cost basis and these costs would be deemed a capital asset and when the asset is disposed off (or sold) these cost basis are offset against the selling price.

Thus you would have a capital gain or loss on the sale of the vacation property.