26 USC 248 - Organizational expenditures

U.S Code last checked for updates: Oct 17, 2024

§ 248.

Organizational expenditures

(a)

Election to deduct

If a corporation elects the application of this subsection (in accordance with regulations prescribed by the Secretary) with respect to any organizational expenditures—

(1)

the corporation shall be allowed a deduction for the taxable year in which the corporation begins business in an amount equal to the lesser of—

(A)

the amount of organizational expenditures with respect to the taxpayer, or

(B)

$5,000, reduced (but not below zero) by the amount by which such organizational expenditures exceed $50,000, and

(2)

the remainder of such organizational expenditures shall be allowed as a deduction ratably over the 180-month period beginning with the month in which the corporation begins business.

(b)

Organizational expenditures defined

The term “organizational expenditures” means any expenditure which—

(1)

is incident to the creation of the corporation;

(2)

is chargeable to capital account; and

(3)

is of a character which, if expended incident to the creation of a corporation having a limited life, would be amortizable over such life.

(c)

Time for and scope of election

(Aug. 16, 1954, ch. 736, 68A Stat. 76; Pub. L. 94–455, title XIX, §§ 1901(a)(36), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1770, 1834; Pub. L. 108–357, title VIII, § 902(b), Oct. 22, 2004, 118 Stat. 1651; Pub. L. 113–295, div. A, title II, § 221(a)(42), Dec. 19, 2014, 128 Stat. 4044.)

cite as: 26 USC 248