Manifest Money Talks

Amortization of start-up costs is over a period of 180 months, or 15 years according to IRS publication 535 which you can read here: http://www.irs.gov/pub/irs-pdf/p535.pdf



Also, the first $5,000 of start-up expenses can be taken your first year so if your start-up cost is $5,000 you don't need to amortize at all.



Be careful what advice you follow from free websites because many seemingly knowledgable people post completely wrong information quite often. Your best be is to look at Publication 535 from the IRS and see for yourself. That way you don't have to wonder. Or, see advice from a professional but one who is always willing to give you references in a published source to back up what they claim they know to be true.

I started and purchased a few businesses. I agree with your attorney and what the others here said.



On the accounting issue, if you paid for some of the expenses before the organization came into existence, say $1,000 in fees for something, keep a record of it, then when you start the books for the company, CR the $1,000 as a "Owner contribution", and DR $1,000 into the startup account.



In addition, in some cases, I had to track driving around mileage, spend money on travel, gifts, lodgings at out of town locations, etc. all of which are part of startup. Document what you do, prepare expense reports, and book it as I described above.



What I do is I expensed as much as I can, but still book something to startup, so in case anyone checks, it wouldn't raise too many red flags.