LLC registered, but not operational yet, therefore no income for this past year. We have already incurred a decent amount of startup costs ($15k). Can I claim deductions?

dbrwn8705 · ‎May 31, 2019

We have been slowly working toward our dream of opening a food truck. We started purchasing equipment, the trailer, and miscellaneous items back in 2013 - all of which are documented. We just registered as an LLC in the state of Texas last week (Jan. 2017). We will be operational in the spring. I want to claim business deductions on my 2016 taxes. Can I do this?

Rick19744 · ‎May 31, 2019

You can only claim deductions related to your business once you have actually begun your business; which according to your facts is the spring of 2017.

See the attached link with some IRS commentary on this matter.

https://www.irs.gov/publications/p535/ch08.html

*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.

View solution in original post

Rick19744 · ‎May 31, 2019

You can only claim deductions related to your business once you have actually begun your business; which according to your facts is the spring of 2017.

See the attached link with some IRS commentary on this matter.

https://www.irs.gov/publications/p535/ch08.html

*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.

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LLC registered, but not operational yet, therefore no income for this past year. We have already incurred a decent amount of startup costs ($15k). Can I claim deductions?