Tax Write Off Question

[Rafael Lopez]

Keep in mind I'm in a different state than where I'd hold property. 

If in 2016 I flew out of state to meet with some people and tour neighborhoods. Also purchased some business related items such as printer,  computer,  etc. I also attempted to buy property in 2016 but it fell through. However, I don't actually purchase a property until 2017.  Is it possible to write off expenses from 2016?

[Seth Macomber]

@Mike Reynolds @Chase Worst

Okay, well now it depends. That's why I said in my previous post "generally, yes." Things are often not what they seem to be with the IRS hehe There's always an "however."

If you have your business license in 2016, you can write-off your expenses in 2016. Those write-offs will be against $0 Income, thus leaving you with a negative Net Income (on your Schedule C). That negative Income will flow from your Schedule C to your 1040 and lower your Total Income. 

If you have no documentation that your business started in 2016, than you would take the expenses in the year of the realized gain. Which sounds like it will be 2017.

Since it would be your first year reporting income, just bear in mind Capital Costs. The IRS wants start-up costs to be amortized.

Hope that helps.