How & When to Write Off the Start-up Cost for Your Business

Capital Expenses:
Start-up costs and organizational costs are capital expenses. Capital expenses are generally not deductible and are added to the taxpayer’s basis in the business. If the expenses are not otherwise recoverable through depreciation, amortization, depletion or the cost of goods sold deduction, the expenses are recovered at the time the business is sold.

Start-up and Organizational Cost
Deduction Limits for 2011 are $5000 for each; reduced dollar-for-dollar when the total costs exceed $50,000. Limits apply separately.