your situation seems to be different. you seem to be saying you actually started a business that was unsuccessful the following is for a business that never becomes active. if you took the $5K deduction and took amortization on the excess you are saying you actually started a business.
If your attempt to go into business is unsuccessful. If you are an individual and your
attempt to go into business is not successful,
the expenses you had in trying to establish
yourself in business fall into two categories.
1. The costs you had before making a decision to acquire or begin a specific business. These costs are personal and nondeductible. They include any costs
incurred during a general search for, or
preliminary investigation of, a business or
investment possibility.
2. The costs you had in your attempt to acquire or begin a specific business. These
costs are capital expenses and you can
deduct them as a capital loss
