What's the correct way to capitalize software costs for a single-member LLC? I'm currently incurring startup fees and software development costs. When the LLC is open, I intend to assign it the software IP. How should I represent these expenses when opening the books?

ANSWER

The BIDaWIZ Team's Answer:

These types of expenses would fall under Section 195 of the internal Revenue Code and IRS Publication 535. You can deduct up to $5,000 of startup costs in the first year as incurred and the remainder would be amortized over 180 month period. Please note that you can also deduct up to $5,000 of organizational costs.