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Expenses Incurred Prior to LLC Formation

isalanteisalante subscriber Posts: 1
edited December 2007 in Business Planning
My business partner and I are in the process of forming an LLC and it probably won`t be finished until after the end of 2007. What`s the easiest/best way to account for expenses incurred prior to LLC formation?
Thanks for your help.


  • PiperTaxPiperTax subscriber Posts: 5
    When you say "account for," what precisely are you asking? Do you want to know the journal entry that should be made for QuickBooks (or other similar software)? Or do you want to know what records must be kept to prove the deduction to the IRS/state? Or...something else?
  • isalanteisalante subscriber Posts: 1
    Sorry, I should have been more clear. What records do we need to keep to prove the deduction to the IRS?
    Additionally, so far we`ve paid initial server costs/domains/etc using our own personal funds. Since the LLC won`t be completed until after 2007 how do we go about writing off the expenses? Is it done on our own separate personal tax returns or?
  • PiperTaxPiperTax subscriber Posts: 5
    As to what records need to be kept, it`d be the same as with any other deduction. Keep a receipt and a cleared check. (Or a receipt and a credit card statement.)As far as how to treat costs incurred prior to the business beginning operations, check out IRS Publication 535. And then do a "Control+F" search for "start-up."
    PiperTax2007-12-15 17:37:42
  • infiniqueinfinique subscriber Posts: 0 Member
    As long as the costs are related in the running of the businesses, they are deductible. Do remember to keep all receipts.
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