It depends. Business costs of this type can be deducted provided the costs were incurred in connection with expanding an existing business. An example of an existing business incurring deductible expansion costs would be when the expansion occurs regularly given the nature of the existing business. For example, when a restaurant opens another restaurant. In this type of situation, most of the related costs would appear to be recurring, and thus fall within the category of ordinary and necessary business expenses.
However, some business expansion costs may need to be capitalized as you suggest if they create a benefit beyond the current year. An example of business expenses incurred in connection with a business expansion that must be capitalized would be legal fees. For example, if you incurred legal fees because your attorney negotiated a new lease for your second location, those legal fees would need to be amortized over the term of the new lease.
If you prefer, you can provide some additional detail regarding the expenses/fees you incurred when opening the second location so that we can better understand your tax situation.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
