Tangible asset acquisitions are not part of start-up costs.
Generally, a business is entitled to claim depreciation deductions for property beginning in the year the property is “placed in service.” Similar rules apply to Section 179 deductions and “bonus depreciation” deductions, as well as certain other tax law provisions.
Based on the above, it appears that a taxpayer could be using property even though the business has not yet started.
The IRS position is that depreciation does not begin until the business has started. While there was a case that allowed for bonus depreciation based on the facts of the case, the IRS has issued an Action on Decision (AOD 2017-02) that it will not follow that court decision. The IRS bases its decision on a number of other cases in their favor.
Bottom line, I would recommend that you start depreciation in the month you have begun business.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
