This article will assist you with expensing and amortizing start-up costs or organizational expenditures in Intuit ProConnect.
Start-up costs and organizational expenditures are typically capitalized or amortized over five years. However, for costs incurred after 10/22/2004, up to $5,000 of these expenses are eligible to be expensed as a deduction. The remainder is amortized over fifteen years. This deduction is phased out dollar-for-dollar for costs exceeding $50,000.
Follow these steps to enter start-up costs or organizational expenditures:
- Go to the Input Return tab.
- Go to the Depreciation quick entry screen:
- Individual, Fiduciary, or Corporate: Deductions > Depreciation
- Partnership or S Corporate: Ordinary Income > Depreciation (4562)
- Exempt Organization: Expenses > Depreciation
- Enter a Description of property.
- Select the appropriate Form from the drop-down list.
- In the Category field, select 8=Amortization.
- For Date placed in service, enter the date that the expense occurred.
- For Cost or basis, enter the amount of start-up cost or organizational expenditure.
- Click inside of the Method field to open the drop-down list.
- Select Nonrecovery methods, then press 91=Straight Line.
- Click the Details button.
- Scroll down to the Regular Depreciation subsection.
- Enter the desired number of years in Life or class life (recovery period automatic).
- Select the appropriate Amortization code section from the list.
- Enter the actual expensed amount (up to $5,000) in the Basis reduction (amortizable costs expensed, ITC, etc.) field.
Follow these steps to include these costs on the balance sheet:
- From the left of the screen, select the applicable Balance Sheet screen:
- Balance Sheet (Corporate)
- Balance Sheet, M-1, M-2 (Partnership)
- Balance Sheet, M-1, M-2, M-3 (S-Corporate)
- Select Balance Sheet.
- Select the applicable screen:
- Assets, Liabilities and Capital (Corporate)
- Federal (Partnership or S-Corporate)
- Locate the Assets section.
- Enter the expenditure amount in the Intangible assets * field under the Ending column.
- Enter the same expenditure amount in the Less accumulated amortization * field under the Ending column.
- Go to the Check Return tab.
- View Schedule L of the main form.
- The two amounts will offset each other on the Balance Sheet.