Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
cctb4552
New Member

Are rules for start up deductions different for Mark To Market Traders?

Are start up cost deductions rules different for a Mark To Market trader? Can you deduct all start up costs and if so how far back can you go from business start date?

1 Best answer

Accepted Solutions
DawnC0
Intuit Alumni

Are rules for start up deductions different for Mark To Market Traders?

No, they are the same.  You will enter all of your start-up costs in the year you ''open for business''.  For start-up expenses, it does not matter in what year the expense was incurred.  Some businesses take years to "startup" before they are open.   

Start-Up Expenses are reported in aggregate - one amount equal to the total of all expenses incurred.  In the year you become ''open for business'', these costs are entered either under Assets/Depreciation or under Business Expenses depending on the amount.

  • Per IRS Pub 535 Business Start-Up and Organizational Costs: "Business start-up and organizational costs are generally capital expenditures. However, you can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs paid or incurred after October 22, 2004. The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Any remaining costs must be amortized."

In TurboTax, there is a special place for these costs to be entered once you are ready to do so.  You will need to indicate that you started your business in 2017 (beginning of economic activity) in order to enter startup costs.  Examples may include:

  • - Market Research
  • - Travel Costs
  • - Salaries
  • - Consulting fees
  • - Accounting and Legal Fees
  • - Pre-opening advertising expenses
  • - Overhead
  • - Employee Training
  • - Equipment
  • - An analysis or survey of potential markets, products, labor supply, transportation facilities, etc.
  • - Advertisements for the opening of the business.
  • - Salaries and wages for employees who are being trained and their instructors.
  • - Travel and other necessary costs for securing prospective distributors, suppliers, or customers.
  • - Salaries and fees for executives and consultants, or for similar professional services.

 

View solution in original post

1 Reply
DawnC0
Intuit Alumni

Are rules for start up deductions different for Mark To Market Traders?

No, they are the same.  You will enter all of your start-up costs in the year you ''open for business''.  For start-up expenses, it does not matter in what year the expense was incurred.  Some businesses take years to "startup" before they are open.   

Start-Up Expenses are reported in aggregate - one amount equal to the total of all expenses incurred.  In the year you become ''open for business'', these costs are entered either under Assets/Depreciation or under Business Expenses depending on the amount.

  • Per IRS Pub 535 Business Start-Up and Organizational Costs: "Business start-up and organizational costs are generally capital expenditures. However, you can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs paid or incurred after October 22, 2004. The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Any remaining costs must be amortized."

In TurboTax, there is a special place for these costs to be entered once you are ready to do so.  You will need to indicate that you started your business in 2017 (beginning of economic activity) in order to enter startup costs.  Examples may include:

  • - Market Research
  • - Travel Costs
  • - Salaries
  • - Consulting fees
  • - Accounting and Legal Fees
  • - Pre-opening advertising expenses
  • - Overhead
  • - Employee Training
  • - Equipment
  • - An analysis or survey of potential markets, products, labor supply, transportation facilities, etc.
  • - Advertisements for the opening of the business.
  • - Salaries and wages for employees who are being trained and their instructors.
  • - Travel and other necessary costs for securing prospective distributors, suppliers, or customers.
  • - Salaries and fees for executives and consultants, or for similar professional services.

 

Dynamic AdsDynamic Ads
Privacy Settings
v