In the final review of the 1065 I am working on, I am getting a message that it was indicated that it is an initial year but the Deemed Election to Amortize Organizational Expenditures has not been made. When you click on fix this problem it goes to another screen which states...
Consider filing a section 709(b) election, even if you don't have any organizational costs to amortize. This protects the company in case of an audit where operating expenses are reclassified as organizational costs.
There are two election forms I found. One for 195(b) election and one for 709(b) election. It appears these are not filed with the return just kept with your records. Is this correct? Also, if you are filing these elections to protect against an audit, there are no amounts to fill in, and then this results in way more errors on the review.
What is the correct way to handle both these elections?
