Anesthesiologist starts up a new business. Under state regulations, he cannot perform the type of anesthesia he does until he first does 2 demonstrations in the location (dental office) he will be working at on the equipment that will permanently be located there. He wants to travel around to dozens of locations across the state performing these services.
When he does the demonstrations (which is real anesthesia on real patients who need real dental procedures), he gets paid, about $2k per day of demonstrations. After he's done the 2 days of demonstrations on that equipment at that location, he is permitted to operate there on a normal basis.
He'll be doing demonstrations in the latter part of 2022, but he won't begin operations (other than the demonstrations) until 2023.
Startup costs are not deductible until the active business begins. When does the startup period end and the active business begin for this business?
Bonus question for extra credit: If the LLC makes an election to be taxed as an S corporation, and the election is after some startup costs have been paid but before the active business begins, how do I treat those startup costs? Are they transferred to the corporation like under Sec. 351?