George has decided to start up a business operating a chain of grocery stores and form a C corporation to conduct the business. She has decided to name the C corporation, George’s Grocery Chain of Stores, Inc. (“George’s Grocery Chain of Stores”).

George’s Grocery Chain of Stores will be a calendar year taxpayer. George contributed cash to the C corporation in exchange for the shares in the C corporation. This is a first-time venture for George so she is nervous and excited. Initially, there will be one store but she plans to operate a number in the future, hence the choice of name for the entity.

George’s Grocery Chain of Stores has leased a building, purchased equipment such as shelving, racks, bins, counters, freezers, and registers. There have also been expenses incurred prior to opening the doors for advertising, licensing, training, cleaning, etc.

George’s Grocery Chain of Stores would like to understand the amount of the income tax treatment for the expenditures that have been incurred to date. In tax parlance, these are often referred to as start-up expenses.

George’s Grocery Chain of Stores has not provided the amounts that have been incurred so you should contrast if the start-up expenses incurred were $20,000 vs if the start-up expenses were $70,000. When researching you may want to consider the following (and please note this is not an exhaustive list just a guide to help you get started): When researching you may want to consider the following (and please note this is not an exhaustive list just a guide to help you get started):

IRC §195

Regs. Sec. §1.195-1

IRC §248