legal, united-states, startup-costs, taxes, llcI have developed a mobile app, but per very popular advice, I want to sell it as a LLC in US. So I plan to create a LLC. The question is, can I deduct development cost of the app in any way? Amortize it?
To develop it I had the following biggest expenses within a single tax year:
The article I found references many different situations, but I’m not sure if anything fits my scenario.
I think the following fits the most:
Software that is developed by the taxpayer is treated like other research expenditures. It may be deductible over Code Sec. 174(a) as expenses are paid. The taxpayer may instead elect to capitalize the cost of the software under Code Sec. 174(b) and to amortize the costs over 60 months, beginning at the time the software is completed.
Can I go with 174(b) option? and what could be amortized? Only 1-2 or all three? If latter, how to come up with the final cost?
If you had revenue, then you can definitely deduct your costs to reduce your tax burden. If your costs are greater than your revenue, then you may be able to carry over the loss to deduct it in a future tax year, but that is a more complicated topic and you’ll probably want to talk to an accountant.
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