Posted by William on July 26, 2003 at 14:55:13:
Legal fees paid after you are in business are expensed. However when professional fees cover future years, they must be deducted over the life of the benefit. Some fees, however fall into a gray area, and you can choose between deducting them all in the first year or spreading them over future years. See your tax advisor for specific info on your business.
Good Luck!
LLC organizational costs: exp or amortz? - Posted by Erick
Posted by Erick on July 25, 2003 at 21:41:11:
I know that organizational costs incurred when you first organize a company like an LLC are supposed to be capitalized and then amortized over 5 years. However, IRS publication 535 says those organizational costs (like legal costs of admitting a new member) incurred after the first year are “nonqualified costs” for amortizing.
So, how should they be treated; expense them? Or, are they non-capitalizable AND non-deductible?
Thanks