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Start up cost deduction with zero income

michelle1388
Level 1

Hi Hi, my client opened up a start-up company last year. The business has zero income but incurred around $30k in expenses. Will it make any difference to his tax return if we select to take the $5000 start-up cost deduction? 

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Accepted Solutions
Accountant-Man
Level 13

Read IRC section 195.

** I'm still a champion... of the world! Even without The Lounge.

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6 Comments 6
George4Tacks
Level 15

That sounds like a really good question for them to present to their tax professional. That person will have the complete picture of all of the aspects of the tax return. 


Here's wishing you many Happy Returns
sjrcpa
Level 15

Did the business really open last year?


Ex-AllStar
Accountant-Man
Level 13

Read IRC section 195.

** I'm still a champion... of the world! Even without The Lounge.
IRonMaN
Level 15

If they opened up the business and had $30K in expenses but zero income, it sounds like someone forgot to unlock the front door of the business.


Slava Ukraini!
michelle1388
Level 1

thanks everyone for your reply. Yeah... they started their business last year and are in the R&D stage of the business. 

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sjrcpa
Level 15

Then read IRC Section 174, too.


Ex-AllStar