[Code of Federal Regulations]
[Title 26, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.195-1]

[Page 271]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.195-1  Election to amortize start-up expenditures.

    (a) In general. Under section 195(b), a taxpayer may elect to 
amortize start-up expenditures (as defined in section 195(c)(1)). A 
taxpayer who elects to amortize start-up expenditures must, at the time 
of the election, select an amortization period of not less than 60 
months, beginning with the month in which the active trade or business 
begins. The election applies to all of the taxpayer's start-up 
expenditures with respect to the trade or business. The election to 
amortize start-up expenditures is irrevocable, and the amortization 
period selected by the taxpayer in making the election may not 
subsequently be changed.
    (b) Time and manner of making election. The election to amortize 
start-up expenditures under section 195 shall be made by attaching a 
statement containing the information described in paragraph (c) of this 
section to the taxpayer's return. The statement must be filed no later 
than the date prescribed by law for filing the return (including any 
extensions of time) for the taxable year in which the active trade or 
business begins. The statement may be filed with a return for any 
taxable year prior to the year in which the taxpayer's active trade or 
business begins, but no later than the date prescribed in the preceding 
sentence. Accordingly, an election under section 195 filed for any 
taxable year prior to the year in which the taxpayer's active trade or 
business begins (and pursuant to which the taxpayer commenced amortizing 
start-up expenditures in that prior year) will become effective in the 
month of the year in which the taxpayer's active trade or business 
begins.
    (c) Information required. The statement shall set forth a 
description of the trade or business to which it relates with sufficient 
detail so that expenses relating to the trade or business can be 
identified properly for the taxable year in which the statement is filed 
and for all future taxable years to which it relates. The statement also 
shall include the number of months (not less than 60) over which the 
expenditures are to be amortized, and to the extent known at the time 
the statement is filed, a description of each start-up expenditure 
incurred (whether or not paid) and the month in which the active trade 
or business began (or was acquired). A revised statement may be filed to 
include any start-up expenditures not included in the taxpayer's 
original election statement, but the revised statement may not include 
any expenditures for which the taxpayer had previously taken a position 
on a return inconsistent with their treatment as start-up expenditures. 
The revised statement may be filed with a return filed after the return 
that contained the election.
    (d) Effective date. This section applies to elections filed on or 
after December 17, 1998.

[T.D. 8797, 63 FR 69555, Dec. 17, 1998]