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  • 1.  How to categorize a failed invention expense

    Posted 01-02-2014 04:22 PM
    I have a client that invested money in an invention that never materialized.  The invention related to her business.  Has anyone ever had this situation and how should this large disbursement be handled for tax purposes?
    Thanks!

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    Chris Murphy 
    SANDRA JOHNSON, CPA PC
    Bellmore NY
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  • 2.  RE:How to categorize a failed invention expense

    Posted 01-02-2014 05:49 PM


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    M. Daniel Martin BA
    M. DANIEL MARTIN, CPA EA
    Babylon NY
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    You write the invention is business related.  Any reason a 1231 loss won't apply?  Put it on the 4797 as a total business loss as an asset never placed into service.  Just make sure it can be explained. 





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