1120-US: Deducting start-up and organization costs (FAQ)

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Question

How do I deduct start-up and organization costs?

Answer

If you enter start-up and organization costs in the asset module, use the Method/Life Wizard to select Intangible asset (IRS Code Sec 195) or Intangible asset (IRS Code Sec 248) in the Method field. Enter the amount deducted in the Start-up/Org Exp field. If you do not use the Method/Life Wizard when you enter the start-up and organization costs, select the respective amortization section from the drop-down list in the Amortization section field in the Other tab for the asset.

If you do not use the asset module to enter start-up and organizational costs, enter the amount deducted for the start-up and organizational costs in the statement dialog attached to the Amortization detail field in Screen 4562.

The total amount deducted for the start-up and organization costs transfers to the Other deductions line on the tax return.

Per IRC Regulations 1.195-1 and 1.248-1, a formal election to deduct the start-up and organizational costs incurred after September 8, 2008, is not required.

Related topic: 1120 frequently asked questions

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