Question

a sole proprietorship that began business may 1 2017 incurred $9000 of start up expenses if the business elects to report the maxium amount of start up costs as a current expense what is the amortization amount reported as an other expense on schedule C

Answer 1

Compute the amortization amount reported as an “Other expense” on Schedule C, in the following manner: Amortization expense for the year =($9,000 - $5,000)x-dmonths = $4,000x 8 months 180 = $178 Note: If the start-up costs are less than $50,000, the deduction allowed is $5,000. The costs remaining after the deduction allowed is then amortized in equal proportions over the next 15 years. Thus, the remaining $4,000 are to be amortized over 180 months. Since start-up began the business on May 01, 8 months for the year have been considered.