Expenses incurred before business starts aren’t deductible right away.
An engineer bought vacant land with the intent to eventually farm and develop it.
Although he spent time and money working on the land, began constructing a barn,
and even came up with a business plan, he never got past the preparatory stage.
All his pre-opening costs must be capitalized.
Antonyan, TC Memo. 2021-138
Firms can elect to deduct up to $5,000 of their start-up costs in the first year that they actively engage in business, with the remainder amortized over 180 months