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501c3 start up funding

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Level 2

All,

a client started a 501c3, filed all the docs but has not received the IRS determination letter. How should the start-up costs be handled?  

Thanks!

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Level 1

It depends on the size of the 501C3.  If small (less than $1 million in Fund Balance), expense as incurred using the Cash Basis.  If the organization will be greater than $1 million in Fund Balance, accrue all start-up expenses and amortize over 60 months.

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Level 2

Thanks!

Actually the client put in roughly $2000 to start up the 501c3 and has yet to receive any other donations. So fund balance is zero. Curious how to handle clients $2k in startup fees.

Thanks!

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