Start-up and organization costs deductions FAQ (1065)

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The following includes an answer to a common question about deducting start-up and organization costs.

Question

How do I deduct start-up and organization costs?

Answer

UltraTax CS automatically transfers the start-up and organization costs that you enter in the asset module directly to the other deduction line of various tax forms. To enter the startup and organization costs deduction in the asset module, use the Method Life wizard to select Intangible asset (IRS Code Sec 195 - start-up expenses) or Intangible asset (IRS Code Sec 709 - organization expenses (1065 only)). If you do not use the Method Life wizard, select the amortization section from the drop-down list in the Amortization section field in the Other tab. Enter the amount deducted in the Start-up/Org Exp field.

If you do not use the asset module and instead enter summary information in Screen 4562, enter the amount deducted for the start-up and organization costs in the statement dialog for the Amortization detail field. Enter the amount deducted in the Expense Deduction column, and enter 195 or 709 in the Code Section column.

Per Regulations sections 1.195-1 and 1.709-1, a formal election to deduct the start-up and organization costs incurred after September 8, 2008 is not required.

Related topic: 1065 Frequently asked questions

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