Someone had an idea for what a new product would do. I figured out how to build one. To build a prototype and e-mail him pictures, I bought 4 things: 2 things that I canabalized for parts and 1 soldering iron and 1 camera. The plan is to form an LLC jointly, but this has not yet be done.
For several years, I used to do consulting work providing engineering services as an independent contractor and receive a 1099-MISC. I never officially terminated that business, but have not received income from it since becoming a W-2 employee in 2005.
Can I deduct the items listed above as business expenses? Are they “supplies” or are they section 179 tangible personal property?
Since we have not formalized our relationship, or we a partnership or sole proprietors?
What should I check on the box that asks about passive activity versus material participation? I did all of the development and found a patent lawyer (<100 hrs). He solicited manufacturers (with no luck).
I canabilized two existing products to use their electrical or electronic circuitry NOT HUMAN PARTS. I want to know if I can deduct the cost of these two items, plus the camera and soldering iron. Also, do I depreciate them, or are they supplies?
I also burned the dining room table with the soldering iron or the solder. Is that a business expense (Schedule C) or a personal casualty loss (Schedule A).
Moira Marquart
You canabalized human parts and you writting that off for business expense?
You are sick.
These are startup expenses. No income, no expense (yet).