C Corp required to file a tax return for only start-up costs?

[David]

New client brought in financial information for his new C Corp business. He incorporated in November 2017 and incurred organization costs and start-up costs in November through February. He actively began operating his business March 1, 2018.

The client wants me to prepare his 2018 tax return which has a NOL.

Even though the corporation was not active until 2018 isn't it still required to file a 2017 tax 1120? The 2017 1120 would show no revenue or expenses and would only report a balance sheet showing cash, org costs and start-up costs as assets and also report shareholders equity. Is my understanding correct? 

Thanks.

[Lee B]

 

 

!.  When did he file his SS-4 and obtain an EIN ?

2. What is the date on the IRS EIN letter and is the IRS expecting a tax return for 2017 ?

[Pacun]

If you want to have a calendar year, file 2017 and establish it.

[DANRVAN]

1120 is required for any taxable year whether there are income and expenses or not.  That should be spelled out in 1120 instructions.

[Taxalmancer]

I think what David is alluding to is there is no income nor expenses in 2017, only assets.

[Max W]

The Org and startup costs, $5000 ea, are deducted in the year the business becomes operational.  Anything over $5000 fro ea., is depreciated  over 15 yrs starting with the month the biz begins operations.  Anything over $50,000 is phased out.

The reason you see new business locations open without much promotion and the Grand Opening taking place a week or 2 later is so the promotional cost is not considerd a startup cost and can be written off, rather than depreciated, or worse, phased out.