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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 577
Experience:  10 years experience
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My daughter is a singer/songwriter who is currently growing

Customer Question

My daughter is a singer/songwriter who is currently growing her fan base and has recently been picked up by a label. I expect that I will be investing several thousand dollars in her endeavor this year (songwriting, production, travel, etc.). I was hoping that I could setup a business entity that would allow me to write off my investment this year since I don't expect a return for a couple of years. Is there a way to do this?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.
Hi and welcome to our site!You definitely may start a business - and qualified business expenses may be deducted.Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business operates to make a profit.To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.We need to be clear if your business actually started.If the business is not started - all expenses are classified as startup expenses - and as such are capitalized.The business is considered as started when you have a product or service for sale.After the business started - all qualified expenses are deductible.