Posted by Erick on August 06, 2003 at 21:35:30:
You should check IRS publication 535 for more detail as I’m not the expert John is but the publication is pretty clear on the basics.
Here are a few tidbits I pulled out of that pub:
-They really have to be start up or organizational costs. In other words, those expenditures incurred at the time of the entity formation. For example, the costs of admitting a new member later on are non qualifying.
-The entity makes the election. So, I think, technically, the answer to your question would be “no”. They are amortized and the annual deduction is netted against the LLC’s income/rents. There are more details though and I don’t want to step on John’s toes here b/c I’m no expert but I believe the IRS publications (assuming you take those as gospel) are pretty clear on these areas. -see page 35 of pub 535 near the top of the 2nd column.
-They are amortized over 60 months and I do believe it’s straight line.
-Refer also to form 4562.