Thanks again, pk. But what do you think about this link, which says that a single member LLC can deduct organizational expenses up to $5000, instead of capitalizing them over many years? I wonder if it's different if your LLC is filing as a dormant entity? And I wonder if fee I paid to a foreign lawyer to get me a business license and register my company is an "organizational expense"?
https://www.nolo.com/legal-encyclopedia/deducting-organizational-costs-single-membrer-llcs.html
These tax law provisions do not apply to one-person LLCs, because they are disregarded entities. The IRS says that one-person LLCs may deduct in a single year organizational costs that do not exceed $5,000. However, if a single member LLC's organizational expenses exceed $5,000, no portion of the expenses is deductible. Instead, the entire amount must be capitalized. This means they would not be deductible until the LLC is dissolved. (Treasury Regs. Secs. 1.263(a)-5(d)(1) and (3).)
Example 1: Larry forms a single-member LLC to run his consulting business. He incurs $800 in expenses for the llc operating agreement, articles of organization, and filing fees. Since these expenses are below the $5,000 threshold, he may deduct the entire amount the first year the LLC is in business.
Example 2: Assume that Larry incurs $6,000 in legal expenses to set-up his one-member LLC. Since this amount is over the $5,000 threshhold, none of these organizational costs are deductible or amortizable. Larry must capitalize the $6,000 expense. These costs will only be deductible upon the LLC's dissolution and termination.
The moral is that if you form a one-member LLC, you should never spend more than $5,000 in organizational expenses. For the great majority of one-member LLCs, this should not pose a problem.
