I received my real estate license in Jan 2019. I paid for class, had mileage, paid for exam, etc. in Nov/Dec 2018. I started application process in Dec 2018. Can I claim these expenses for 2018, even though license was not granted until 2019?

[JulieR · Accepted solution]

No. The expenses you describe fall under the category of "Start-Up Expenses" and will be reported on your tax return in the year you begin doing business, presumably, that will be 2019.

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."

See Startup Business Tax Tips for more information about this topic.

[MyKoala]

Thank you.