Business Deductions
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- Home Office Deduction
- Meal and Entertainment Expenses
- Organizational Costs and Start-up Costs
- Qualified Plan Awards
- Schedule C Expenses
- Section 197 Intangibles
- Should You Sell or Trade in Your Car?
- Start-up Costs
- Travel Expenses
More Tax Topics
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- Top Tax Myths
- Per Diem Rates - IRS Publication 1542 Oct 2011 for Travel Within the Continental U.S (for employers who pay a per diem allowance to employees)
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Purchasing an Active Trade or Business
Amortizable start-up costs for purchasing an active trade or business include only investigative costs incurred in the course of a general search for or preliminary investigation of the business.
These are the costs that help you decide whether to purchase a new business and which active business to purchase.
However, costs you incur in an attempt to purchase a specific business are capital expenses that you cannot amortize.
For example, your attorney prepares a letter of intent and performs services after the letter is sent.
The cost to prepare the letter and the cost of services performed after the letter is sent would be deductible as a capital loss because they are costs incurred in an attempt to purchase the business.
Next:
Start-up Costs: Costs of Not Going Into Business
Related Links
- What Are start-up Costs?
- Qualifying start-up Costs
- Two Categories of start-up Costs
- What are organizational Costs?
- Start-up Costs versus Organizational Costs
- Qualifying Organizational Costs
- Nonqualifying Organizational Costs
- How to Make the Election to Deduct start-up and Organizational Costs
- Deducting start-up and Organizational Costs
- How to Claim start-up and Organizational Costs
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