I paid franchise fee of 30,000 last year. I had a dba that I started in August 2017.I paid the fee using my personal account. Can I deduct that amount under the dba

[Anonymous]

Can I deduct the whole amount or do I have to amortize, my contract is for 10 years for the franchise.

[JulieH1]

You can deduct the fee for your DBA.  It is very common in a small business that the owner has to use their own funds to infuse capital.

You’ll be happy to hear that you can deduct the initial fee you paid…with a caveat. The IRS requires you to amortize this initial franchise fee over 15 years, rather than all at once. The good news is that for the next 15 years, you’ll have that as a tax deduction!

The 10 year life of the agreement does not in itself allow for a 10 year amortization of the original franchise fee 

The amortization amount is computed as if the asset will be held for 15 years. If it is not renewed at the end of the ten years, the remaining balance can be deducted in the 10th year.