You are allowed to deduct the ordinary and necessary expenses you incurred in an attempt to make your business successful.
Start-up costs are accumulated until the point where you 'go live' .
In that year you are allowed to deduct up to $5,000 in start-up costs as an expense and amortize the remaining start-up costs over 180 months.
In the year you shut down the business you would recognize the remaining un-amortized startup costs and would be able to reduce any other income you have. This will result in a capital loss.
Small Business Start-Up Expenses
If your business never actually launched, your costs are capital expenses and you can claim them as a capital loss.
How to Treat Cost for Failed Businesses
