Startup Cost of New Business

[bigjb]

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My brother and I have a business that we rent out a mobile light plant for construction use. My father-in-law bought the light plant for us and gave it to us for this purpose but he is not a member of the partnership. Can the cost of the Light plant be reported in the startup costs of the new business?
Any information is useful. thanks in advance.

Josh

[Skyhawk]

The light plant is an asset and will be depreciated over its usefull life as determined by MACRS (a depreciation system devised by Congress). Your basis is the same as the basis of the donor (one who gave the gift). "Startup" costs are things like license fees, legal and accounting fees, and other expenses incurred in "starting up" a business. I am not familiar with the light plant, but if it is the piece of equipment I think it is it is most likely a seven year or ten year asset. See a tax/accounting professional such as a CPA or Enrolled Agent and get you business and its accounting system properly organized.