You must capitalize, rather than deduct, some costs. These costs are a part of your investment in your business and are called capital expenses. Capital expenses are considered assets in your business. There are, in general, three types of costs you capitalize.
- Business Startup Costs
- Business Assets
Note: You can elect to deduct or amortize certain business startup costs. Refer to chapters 7 and 8 of Pub. 535 for more information.