Kwaku Eason and Ashley Leisner v. Comm., TCS 2024-17
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Printing Business Cards and Stationery Does not Start a Business. (Kwaku Eason and Ashley Leisner v. Comm., TCS 2024-17)
Kwaku Eason and Ashley Leisner attempted to start a business “to provide advice and guidance to real estate owners and investors.” They purchased courses through a company called Advanced Real Estate Education (Education), paying over $41,000 for two courses in 2016. They also had business cards and stationery printed that year but did not provide details of any other activity related to their “business.” After failing to provide many of the services that the taxpayers expected to receive, Education went out of business by the end of 2018.
Most costs incurred prior to starting a business are generally capitalized as startup expenses and amortized over 180 months under §195. The question of when a business starts has been answered repeatedly by the courts. Here, the court cites Richmond Television Corp., 345 F.2d 901 (4th Cir. 1965) for determining when an activity crosses the threshold from startup to active business must wait “until such time as the business has begun to function as a going concern and performed those activities for which it was organized.”