capital purchases before business opens

Technical topics regarding tax preparation.
#1
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CA
Hello,

Client started a photography business at the beginning of 2019. He purchased a lot of equipment and supplies during the year.

Client also put camera equipment and computer servers purchased in 2018 for about $20k into use in the business. I don't believe equipment qualifies to be claimed as a startup expense on Schedule C or amortized over 15 years.

Even though he purchased all this in 2018 can the equipment be capitalized starting at the date in 2019 when he was open for business?

Thanks,
Debbie
 

#2
Coddington  
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Fort Worth, TX
See the Simonson case from the 8th circuit. Not only can it be done that way, it must be done that way. Depreciation does not begin until the active trade or business commences.
-Brian

Director of Tax Accounting Methods & Credits
SourceAdvisors.com

Opinions my own.
 

#3
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North Shore, Oahu
Coddington wrote:See the Simonson case from the 8th circuit. Not only can it be done that way, it must be done that way. Depreciation does not begin until the active trade or business commences.


+1

Recently spent quite a bit of time researching and going over start up rules.

Agreeing 100%.
 


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