I have a 9yr old ecom website, that's losing to Amazon. I signed up for a $35K FBA Store training org, that's a one lifetime fee. Can I amortize it over how many years?

Forum|Forum|7 years ago
June 1, 2019
1 reply
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I have a sole proprietorship and have 2 e-commerce websites since 2008. Sales increased every year until the last 4 years, it has declined. I think it is due to Amazon's dominance. I signed up for a $35K training package with FBA Stores who train and coach members to open and maintain successful Amazon Seller accounts. This $35K is a one time cost for lifetime training, which equates to as long as they are and we are still in business.

Unfortunately it has been a huge loss for so many people, and Amazon is now suing FBA Stores. In the meantime, I am out $35K.

Is there a way, like amortizing or depreciating this FBA Store training package?

TurboTax Home & Biz Mac

Best answer by PatriciaV

If this purchase could be considered a franchise fee, it would be amortized over 180 months (15 years). But if it was marketed and sold as a training course with ongoing support, it would be considered a business expense. As such, it would be reported and deducted in the year of purchase.

Any business loss created by this expense would offset your other taxable income. And if the business loss created a Net Operating Loss (NOL) this year, you would normally carry back the NOL to the two prior tax years. Then, if there was any leftover NOL after the carryback period, you would carryforward the balance for up to 20 years.

You can elect to waive the two-year carryback period and use the NOL for the carryforward period only. This may be advantageous if the taxable income in the past two years was low or if you expect to have more taxable income in the future. TurboTax will ask you about the NOL carryback in the review section.

PatriciaVAnswer

Level 15

If this purchase could be considered a franchise fee, it would be amortized over 180 months (15 years). But if it was marketed and sold as a training course with ongoing support, it would be considered a business expense. As such, it would be reported and deducted in the year of purchase.

Any business loss created by this expense would offset your other taxable income. And if the business loss created a Net Operating Loss (NOL) this year, you would normally carry back the NOL to the two prior tax years. Then, if there was any leftover NOL after the carryback period, you would carryforward the balance for up to 20 years.

You can elect to waive the two-year carryback period and use the NOL for the carryforward period only. This may be advantageous if the taxable income in the past two years was low or if you expect to have more taxable income in the future. TurboTax will ask you about the NOL carryback in the review section.

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lizzygeeAuthor

Level 2

This is extremely helpful! This is the first time I've posted to Turbo Tax, and I didn't know if I click on the "Recommend answer" that it closes the thread. If there is a "Helpful" button that I'm also supposed to click, I don't know where it is.