Thanks..I'm buying.

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"maxed_out41" <netsurfer802[at]yahoo.com> wrote:

- quote -

Yes...probably amortized over 36 months using straight line
calculation (ie if you bought in 4/1/2005, you could
amortize (deduct) 9/36ths the first year, 12/36ths the 2nd
and 3rd year and 3/36ths the final year 2008. I'm ignoring
the 3 out of 5 year part of the question. If you are buying
it truly to generate a profit, take the deduction. If you
want to create a deduction for buying software you actually
will be using for personal pleasure, its a hobby and no
cigar:-)

- quote -

Making a profit 3 out of 5 years is a good indication the
business is not a hobby. Its more of a rule of thumb than
law. I have clients that lost money 4 or 5 years, then
started making money; also have clients that gave up after
losing money several years. The facts usually make it clear
if you are in business for business or pleasure.

- quote -

36 months...see above.

Mike Lewis, CPA

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I have just started a small sole proprietorship company in
Florida and have a question regarding what I can write off.
It's a web design company and I'm debating whether to
purchase a somewhat expensive software licensing that allows
me to use software to make menu bars on websites with more
than one website.

In regards to this I have the following questions:

1. Is the purchase of such licensing something that a
business would be able to deduct or write off if profit
motive is proven for 3 years out of 5 years of the existence
of the business?

2. Does there have to be a minimum amount that a company has
to make or that I have to make for the year I would be
claiming taxes on and be getting a write-off?

3. If it is deductible can it be written off 100% as for
example current expense are, or would it only be a
percentage?

Thanks very much for any response/s.

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