Enter startup expenses
Do the following to enter startup expenses paid for a new trade or business.
- Go to theBusinessorFarmfolder.
- Select theAssettab.
- AddorEditan asset and enter the cost basis.
- SelectMethod/Life Wizardin the asset module to open the wizard.
- SelectIntangible asset (IRS Code Sec 195). UltraTax CS automatically enters the asset life for startup expenses under IRC section 195 (15 years).
- Enter the total of deductible expenses inStart-Up/Org Exp. If you don’t use the Method/Life Wizard when you enter startup expenses, enter the respective amortization section inAmortization sectionin theOthertab.note
- If you don't use the asset module to enter startup expenses for the trade or business, enter the asset information and the expense deduction amount in the statement window. This window is linked to theAmortization detailfield in the4562screen.
- The total amount deducted for the startup expenses will transfer to the other expenses line on Schedule C or F. If there are startup expenses in excess of this deduction, they’ll be amortized over 15 years and report on Form 4562, Part VI.
- Per IRC Regulation 1.195-1, there's no need for a formal paper election statement to deduct startup expenses incurred on or after September 7, 2008.
