New (tax) year, new help!

Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.

Question

What is the correct procedure for entering start-up expenses paid in connection with a new trade or business?

Answer

1. Click the Asset tab in the Business or Farm folder and enter start-up expenses for the trade or business by entering the cost basis of the asset in the asset module.
2. Click the Method/Life Wizard button in the asset module to open the wizard and select Intangible asset (IRS Code Sec 195). Note that UltraTax CS automatically enters the asset life for start-up expenses under IRC section 195 (15 years).
3. Enter the amount of deductible expenses in the Start-Up/Org Exp field. If you do not use the Method/Life Wizard when you enter start-up expenses, enter the respective amortization section in the Amortization section field in the Other tab.

The total amount deducted for the start-up expenses will transfer to the other expenses line of Schedule C or F. Any start-up expenses in excess of the amount deducted on Schedule C or F will be amortized over 15 years and reported on Form 4562, Part VI.

Related topic: Start-up expense deductions (IRC section 195) FAQ (1040)

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