Question

CPA Properties, LLC spent $3,000 on attorney fees for their articles of incorporation, bylaws, and other legal documents. The LLC also spent $4500 training staff prior to the commencement of business. Lastly, the LLC spent $2900 in consultation fees with their CPA prior to business operations starting. If the business is a calendar-year business that starts operations on June 1, what is the current year’s deduction for these expenses?

Answer 1

Training staff prior to commencement

$4,500.00

consultation fee

$2,900.00

Total preliminary expenses

$10,400.00

one can deduct upto $5000 of start up cost if total cost of start up does not exceed $50000 since start up cost of CPA IS $10400 so it can claim $5000 deduction in year of commencement

and balance $5400 can be cliamed in 180 months . So $300 per month can be dedcted for balance preliminary expenses