Purchasing an Active Trade or Business
Amortizeable 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.
For Freelancers and independent Contractors
- Organize your financial data into one central accounting system on the cloud
- Software kept up to date.
- Your data kept secure
- Anytime, anywhere data access.
- Pay your quarterly estimated taxes online.
- Export Schedule C to TurboTax at year-end for faster filing.
- Save up to 50% off QuickBooks Self-Employed. Track every deduction! Start your free trial now!
Have an accounting or bookkeeping question? Email it to me.
- Return to the Business Deductions Table of Contents to find related links