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Unusual Fed Tax question

I have an unusual Fed Tax question that I need some advice on.
I did have income prior to 2007, and will have income this
and years forward. But 2007 was a zero-income year due to a planned
move to another state, then a near death illness that knocked me out
for the rest of the year.
Will I still be able to deduct business expenses incurred during the
off year? I had several domain and web server fees to keep up, I went
to some training courses and seminars and started developing business
relationships in the new location. I also took advantage of an
opportunity to upgrade some of my capital equipment
Any comments would be appreciated
Thanks in advance...
I did have income prior to 2007, and will have income this
and years forward. But 2007 was a zero-income year due to a planned
move to another state, then a near death illness that knocked me out
for the rest of the year.
Will I still be able to deduct business expenses incurred during the
off year? I had several domain and web server fees to keep up, I went
to some training courses and seminars and started developing business
relationships in the new location. I also took advantage of an
opportunity to upgrade some of my capital equipment
Any comments would be appreciated
Thanks in advance...
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Comments
Aside from that, the general rule of thumb is that if you were "open and able to take customers" then you can usually deduct the expenses. However, in a situation such as yours I would make sure that your tax preparer is comfortable with the situation, because it would be a high risk position to take.
But, as you say, I am in a high risk (I.E. for IRS review) if my Schedule C shows zero revenue.
Maintaining the domain name renewals and web site maintenance is probably explainable, but it`s the capital expenditures that I think would pull the trigger on my file at the IRS.
At this point, I am leaning toward just claiming those two items as expenses and eat the cost of the capital equipment purchases as the price to pay for staying off the IRS radar.
Thanks for your input - you have validated what my EA said.
Steve
Hopefully when I get audited, this might show the agent that I am not exploiting the tax laws, just honestly reporting reasonable expenses to suspend doing business for the year.
Thans for the info. I`ll make sure the EA knows what I m doing.