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Timing is important when deducting business expenses.  For Start-up Business expenses you can deduct them in the year your business is operational. The business start date is the date when a company starts its actual operations, rather than the date of incorporation or registration. It is the day when the business officially begins providing goods or services to customers, generating revenue.   Start-up expenses have to be amortized with a recovery period that starts with the month the business begins to operate active trade or as a business.  See the following IRS page for more information on deducting start-up expenses.    Here’s how businesses can deduct startup costs from their federal taxes If you would like to see more information about Start-ups, see the TurboTax help article below:   Start-up business tax tips      

I want to make sure I understand correctly. If the asset was fully expensed under Section 179 and later sold, wouldn’t the gain be treated as Section 1245 ordinary income on Form 4797? My understanding is that Code L applies only when business use drops below 50%, not when the asset is sold. Could you clarify?

I had the same thought after typing up my last message. I don't think that Empower was ever aware that my husband was terminated since it was so brief (we have a severance letter though). We are trying this approach with Empower now. Fingers crossed.   The loan payments after they resumed were treated as loan payments (though not factored into the amount on the 1099R - doubly frustrating), and they only allow 1 loan at a time. The defaulted loan will sit on the account until paid. We will have the funds available to do a rollover by April 15, but if Empower refuses to recognize it, the defaulted loan will continue to sit there. Any thoughts on these contributions being treated as loan payments after default?

The capital improvements are added to the purchase price of the home and listed as the adjusted basis of the home.  There is not a spot where you list improvements. Since this is a second home, you would list it in the investment section.      You will enter it by doing the following: Federal Income Show More next to Investment Income Start next to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)  Select Other Continue through and select second home for the type of investment Answer how you obtained it You will need to enter the selling price, dates and the cost basis (or adjusted basis) of the home