In short, we were forced to shut down operations and sell. We were unable to compete against Uber, a company that raised more capital than any other in history and is infamous for its anti-competitive behavior. The legacy of Sidecar is that we out-innovated Uber but still failed to win the market. We failed – for the most part – because Uber is willing to win at any cost and they have practically limitless capital to do it.
Adriana includes the $3,200 of gross income on line 21 (other income) of Form 1040. The $1,600 for category 1 is deductible in full on the appropriate lines for taxes and interest on Schedule A (Form 1040). Adriana deducts the remaining $1,600 ($1,300 for category 2 and $300 for category 3) as other miscellaneous deductions on Schedule A (Form 1040) subject to the 2%-of-adjusted-gross-income limit.
“SitePoint was in the business of selling ads and sponsorship in 2000, when the ad market dried up overnight. We had no choice but to reinvent the model in order to keep from going under. We realized we needed to go back to our first principles, evaluate what we had (which was an audience and content), observe the customer’s behavior and usage patterns, and deliver a product to meet their needs. It turned out that people were printing out our programming tutorials at home, so we looked toward print publishing to stay afloat.”
They're the more strategically valuable part of the market anyway. In technology, the low end always eats the high end. It's easier to make an inexpensive product more powerful than to make a powerful product cheaper. So the products that start as cheap, simple options tend to gradually grow more powerful till, like water rising in a room, they squash the "high-end" products against the ceiling. Sun did this to mainframes, and Intel is doing it to Sun. Microsoft Word did it to desktop publishing software like Interleaf and Framemaker. Mass-market digital cameras are doing it to the expensive models made for professionals. Avid did it to the manufacturers of specialized video editing systems, and now Apple is doing it to Avid. Henry Ford did it to the car makers that preceded him. If you build the simple, inexpensive option, you'll not only find it easier to sell at first, but you'll also be in the best position to conquer the rest of the market.

You can elect to deduct the startup expenses by claiming the deduction on your tax return on Form 4562 for the tax year in which the active trade or business begins. You must file the return by the due date, including extensions. For costs paid or incurred after September 8, 2008, you are not required to attach a formal election statement to your return. The election to amortize or capitalize startup costs is irrevocable.


Thankfully, Norwegians are in most cases very trustworthy and transparent already. They are also very pragmatic. So ending your startup as gracefully as possible is especially important. In a small country people talk and word travels fast. You would much rather people say, “Yes, it’s unfortunate things didn’t work out but he/she did their best” than something like “Wow, yeah that was a total shit show all the way to the end.” So be honest and fair as you do, at least the best you can as things are collapsing around you.
Churning customers, employees, and cofounders isn’t failing. While you’re going from one iteration to the next, people will fall off the wagon. It just happens. That’s OK! That’s part of what happens, and even though it’ll feel like it’s a failure, don’t let it discourage you. The question is, does the new strategy make more sense than the old one? You only fail when you fail.

Although you must generally capitalize costs to acquire or produce real or tangible personal property used in your trade or business, such as buildings, equipment, or furniture, you can elect to use a de minimis safe harbor to deduct the costs of some tangible property. Under the de minimis safe harbor for tangible property, you can deduct de minimis amounts paid to acquire or produce certain tangible business property if these amounts are deducted by you for financial accounting purposes or in keeping your books and records. See the following for the requirements for the de minimis safe harbor.


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Intangible property that is not amortizable under the rules for section 197 intangibles can be depreciated if it meets certain requirements. You generally must use the straight line method over its useful life. For certain intangibles, the depreciation period is specified in the law and regulations. For example, the depreciation period for computer software that is not a section 197 intangible is generally 36 months.

The most important way to not spend money is by not hiring people. I may be an extremist, but I think hiring people is the worst thing a company can do. To start with, people are a recurring expense, which is the worst kind. They also tend to cause you to grow out of your space, and perhaps even move to the sort of uncool office building that will make your software worse. But worst of all, they slow you down: instead of sticking your head in someone's office and checking out an idea with them, eight people have to have a meeting about it. So the fewer people you can hire, the better.
After 1.5 years in operation, bitphone.net is shutting down. WE DIDN’T GET HACKED, NOT ONCE! And believe me, they tried! All customer funds are secure and accounted for! (And we are happy to say that!) Unfortunately we’ve had too many users abuse our phone service! Our underlying carrier service now requires we collect your identification when placing calls. – We won’t do it … This is an unfortunate outcome, we had recently enhanced our service considerably! We don’t want to collect your identification, so we have no choice but to close the service.
An electing large partnership, rather than each partner, generally must figure the depletion allowance. The partnership figures the depletion allowance without taking into account the 65%-of-taxable-income limit and the depletable oil or natural gas quantity. Also, the adjusted basis of a partner's interest in the partnership is not affected by the depletion allowance.
According to a trusted source close to the company, Primary Data’s problem from the outset was that its technology was never quite as compelling as it needed to be, given that it was trying to sell mission-critical software. (If it’s not up to snuff, data virtualization software can create challenges with manageability, usability, data quality and performance.)

There is coordination of tax benefits between advance monthly payments of the HCTC and the HCTC. In general, you cannot claim the HCTC for a payment you made for qualifying health insurance when you file your tax return if you previously received the benefit of the advance monthly payment program for that coverage month. If you benefited from the advance monthly payment program, you will receive a Form 1099-H that reports the amount of the payments that were forwarded directly to your health plan administrator for each coverage month. Do not report these amounts on Form 8885.
Perhaps it's because society still holds to the Industrial-era thinking that business life and personal life should be kept separate that books such as these are rare. Most business books fail to deal at all with the personal, the emotional, the human side of business. However, these are the aspects of startup life where we confront real challenges--often alone and without guidance or help. This is beginning to change. And, folks like Brad and Amy, and the others who shared their stories, are helping to make it happen.

Alternatively, Oldcorp can conduct the expansion itself before transferring the new operations to Newcorp. The expansion costs would be related to an existing business and deductible in full as ordinary and necessary business expenses. This alternative may be desirable if Oldcorp has taxable income that it can offset with the startup expenses. Conversely, Newcorp might not have enough taxable income to fully use the deduction in the current year.
You cannot currently deduct interest you are required to capitalize under the uniform capitalization rules. See Capitalization of Interest , later. In addition, if you buy property and pay interest owed by the seller (for example, by assuming the debt and any interest accrued on the property), you cannot deduct the interest. Add this interest to the basis of the property.

If you wish to include transportation of more than 50 miles in the calculation of gross income from mining, request an advance ruling from the IRS. Include in the request the facts about the physical and other requirements that prevented the construction and operation of the plant within 50 miles of the point of extraction. For more information about requesting an advance ruling, see Revenue Procedure 2016-1, available at IRS.gov/irb/2016-01_IRB/ar07.html.

Our foundational structure of startup assessment is the startup lifecycle. Understanding where a startup is in their lifecycle allows us to assess their progress. The startup lifecycle is made of 6 stages of development, where each stage is made up of levels of substages. This creates a directed tree structure and allows for more granular assessment by being able to pinpoint the main drivers of progress at each stage.


If a bad debt deduction increases an NOL carryover that has not expired before the beginning of the tax year in which the recovery takes place, you treat the deduction as having reduced your tax. A bad debt deduction that contributes to an NOL helps lower taxes in the year to which you carry the NOL. For more information about NOLs for individuals, see Pub. 536. Also, see the Instructions for Form 1045, and the Instructions for Form 1139.
Consider a scenario where you successfully open your cake shop for business on 25 October. You incurred $4,500 of start-up cost before your cake shop became operational. You can avail full deduction of the start-up cost in the first year itself. Since the amount of deduction claimed is less that $5,000, there is no cost left to be amortized for the next 180 months.
#2: Reflect and learn. The first startup I worked at failed (I was the first employee, head of product and a key part of the leadership when it failed). I wrote down everything that I thought went right and wrong. It was not only cathartic, but it helped crystallize several life and business lessons. It also provided me with the insight to start another business.
I was great at customer support though. Imagine talking to a customer support person who not only knew everything about the product, but would apologize abjectly if there was a bug, and then fix it immediately, while you were on the phone with them. Customers loved us. And we loved them, because when you're growing slow by word of mouth, your first batch of users are the ones who were smart enough to find you by themselves. There is nothing more valuable, in the early stages of a startup, than smart users. If you listen to them, they'll tell you exactly how to make a winning product. And not only will they give you this advice for free, they'll pay you.
Adidas acquired Reebok and its existing PLM infrastructure and framework in 2006. This allowed the company to populate one database for complete product related information as well as a solution for managing material requirements for efficient design and development of products. Also created was a collaboration platform across countries and regions which helped reduce product development cycle times. Streamlined systems meant that it was now possible to design new products quickly with less need for changes. There was also greater support for concurrent business models and product development and release timelines which then helped with increased features and customization.
Paul and I were definitely working together, especially on "A Day in the Life" ... The way we wrote a lot of the time: you'd write the good bit, the part that was easy, like "I read the news today" or whatever it was, then when you got stuck or whenever it got hard, instead of carrying on, you just drop it; then we would meet each other, and I would sing half, and he would be inspired to write the next bit and vice versa. He was a bit shy about it because I think he thought it's already a good song ... So we were doing it in his room with the piano. He said "Should we do this?" "Yeah, let's do that."[7]
Insurance to secure a loan. If you take out a policy on your life or on the life of another person with a financial interest in your business to get or protect a business loan, you can't deduct the premiums as a business expense. Nor can you deduct the premiums as interest on business loans or as an expense of financing loans. In the event of death, the proceeds of the policy are generally not taxed as income even if they are used to liquidate the debt.
There are so many opportunities to create clones out there. Uber for pets, Facebook for kids, Airbnb for parking places. First of all, when you pitch your idea like this it sounds like a copycat which is really bad. Secondly, if there is no innovation from zero to one there is a very little chance that your company will become great just because your execution is excellent.
Provide tax records. A good preparer will ask to see your records and receipts. They ask you questions to report your total income and the tax benefits you’re entitled to claim. These may include tax deductions, tax credits, and other items. Do not use a preparer who is willing to e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules.
This prospect of failure gives you what I call 'survival' urgency. You develop a bias to action, and an ability to be decisive without overanalyzing, primarily because you don't have the luxury of time. The benefit of developing survival urgency is that it immediately becomes a deeply-rooted orientation. True urgency will do this to you. In my current role at Google, I now have a bias to action that makes me exponentially more productive than when I was a consultant.
You do not have to make an actual charge-off on your books to claim a bad debt deduction for a totally worthless debt. However, you may want to do so. If you do not and the IRS later rules the debt is only partly worthless, you will not be allowed a deduction for the debt in that tax year because a deduction of a partly worthless bad debt is limited to the amount actually charged off. See Partly worthless debts, earlier.

A blend of debt and equity financing, requiring no collateral and does not necessarily involve giving up interest in the company. This capital is typically used to fund growth or to enable management to buy out company owners for succession purposes. The interest rate is high, ranging from 20-30% and lenders can convert their stake to equity or ownership in the event of default.2
Free speech in Canada died today. Trudeau just announced a $600M initiative to give money to “journalists” who are “trusted sources”. Criteria to be set by people appointed by Trudeau.The media bashing Conservatives and the shameless promotion of Trudeau’s warped vision for Canada has just been subsidized by “his” taxpayers.It's amazing how much ingenuity and dedication Trudeau is capable of when he sets out to mercilessly mock “his” taxpayers.
We hired a local operations manager in Denver (Sasha Juliard) and soon launched at Shotgun Willie’s (the highest-grossing strip club in CO) and two other bars. We made about $1,200 on each deal (50% went to DexOne, we spent $800 on each launch event and we had $500 in hardware costs), this was the only sales revenue Flowtab ever made. We were tightening up our sales process, but it was hard to market ourselves properly in those bars without being there. It quickly become a distraction to our operations in San Francisco.
I’m sure many readers will be familiar with The Muse an online business dedicated to helping female entrepreneurs by offering mentorship, advice and career opportunities. What you probably won’t be familiar with is Pretty Young Professional the predecessor to The Muse and Kathryn Minshew’s first startup that fell apart due to bad communication, legal issues, and infighting among the team.

The federal certifying authority will not certify your property to the extent it appears you will recover (over the property's useful life) all or part of its cost from the profit based on its operation (such as through sales of recovered wastes). The federal certifying authority will describe the nature of the potential cost recovery. You must then reduce the amortizable basis of the facility by this potential recovery.
Amazon said that it decided to close down Quidsi because it failed to turn a profit after the acquisition. But one report stated that just a few months before the announcement, execs told Quidsi staff that it was expected to reach profitability this year, leading some to question if Amazon’s feud with Quidsi’s founder, Marc Lore, was the real reason behind the decision to shut it down.

An idea for a startup, however, is only a beginning. A lot of would-be startup founders think the key to the whole process is the initial idea, and from that point all you have to do is execute. Venture capitalists know better. If you go to VC firms with a brilliant idea that you'll tell them about if they sign a nondisclosure agreement, most will tell you to get lost. That shows how much a mere idea is worth. The market price is less than the inconvenience of signing an NDA.

Like most startups, we changed our plan on the fly. At first we expected our customers to be Web consultants. But it turned out they didn't like us, because our software was easy to use and we hosted the site. It would be too easy for clients to fire them. We also thought we'd be able to sign up a lot of catalog companies, because selling online was a natural extension of their existing business. But in 1996 that was a hard sell. The middle managers we talked to at catalog companies saw the Web not as an opportunity, but as something that meant more work for them.
It is not uncommon for an adult in middle years to ask why he or she is doing what they do for a living. In serious reflection on this question, some workers find that the original reasons for their choices are no longer valid. Reasons why mid-life change occurs include: Occupational dissatisfaction, a lack of challenge, lack of career-related identity, stress and anxiety related to job insecurity, workplace bullying, and conflicts between work and other life roles. This can be mitigated by framing needs and expectations to realise a more developed self-concept.
During this time you'll do little but work, because when you're not working, your competitors will be. My only leisure activities were running, which I needed to do to keep working anyway, and about fifteen minutes of reading a night. I had a girlfriend for a total of two months during that three year period. Every couple weeks I would take a few hours off to visit a used bookshop or go to a friend's house for dinner. I went to visit my family twice. Otherwise I just worked.
Buildzar started off as a pure-play B2C ecommerce business. In June, it pivoted to a subscription model. Earlier, we used to generate leads and convert them into transactions ourselves. But, after the pivot, we were just doing lead generation and selling those leads in the market … When transactions failed to pick up, we decided to wind up operations, which in my opinion was the right decision.
If you receive a below-market gift loan or demand loan, you are treated as receiving an additional payment (as a gift, dividend, etc.) equal to the forgone interest on the loan. You are then treated as transferring this amount back to the lender as interest. These transfers are considered to occur annually, generally on December 31. If you use the loan proceeds in your trade or business, you can deduct the forgone interest each year as a business interest expense. The lender must report it as interest income.
One day I got an email inviting me to join a team of three that were founding a healthcare startup. However, the closer I got to the opportunity, the more nervous I got about leaving my great six-figure job and putting a strain on both my finances and my ability to maintain some sort of work-life balance. Leaving to join the startup meant taking a 50% pay cut. Weeks of hand-wringing ensued and I decided if there was a time in my life to jump in the deep end of the pool, it was now.
Entrepreneurs are always on the go, looking for the next startup challenge. And while they lead very intensely rewarding lives, time is always short and relationships are often long-distance and stressed because of extended periods apart. Coping with these, and other, obstacles are critical if an entrepreneur and their partner intend on staying together — and staying happy.

Join the corporate world - If you can slide into middle management, its not too bad. You don’t have to make big decisions or have the burden of running out of resources. Heck, screw middle management, entry level positions are not bad either. Less responsiblity => less stress and if you are true entrepreneur, you will find ways to win. After my failed hedge fund attempt, I took a job that only paid me $36K/year as a customer support stock broker. I was broke and heartbroken and need time to heal. Getting such an easy job was the best decision. It freed me psychologically so that I can think of my next big move. I saved up and made quite a bit of money trading in my brokerage account. The money became seed money and personal “survival cash” for my startup Dealflicks, which was valued up to a $15M valuation at its peak.

We didn’t see a business model that would have been viable long term. Regulators are starting to pay attention to the [cryptocurrency] space, and activities around blockchain assets (tokens exchanges, ICO tools and services, etc.) are likely to become heavily regulated in the next 5 years. That means some of these services will have to shut down or restrict their activities, some might go to prison, and only a small number of well capitalized companies will successfully adapt to the regulator’s demands.


I have failed more times then I succeeded and in most situation I would go back to salaried/contractual work, relax for some time enjoying 9-to-5 working hours, rebuild financials, get bored, start it all over. I think taking a break is the most important part as it gives time to recharge, analyze what went wrong and what I would do better next time.

Any sales tax you pay on a service for your business, or on the purchase or use of property in your business is treated as part of the cost of the service or property. If the service or the cost or use of the property is a deductible business expense, you can deduct the tax as part of that service or cost. If the property is merchandise bought for resale, the sales tax is part of the cost of the merchandise. If the property is depreciable, add the sales tax to the basis for depreciation. For more information on basis, see Pub. 551.
A facility is all or any part of buildings, structures, equipment, roads, walks, parking lots, or similar real or personal property. A public transportation vehicle is a vehicle, such as a bus or railroad car, that provides transportation service to the public (including service for your customers, even if you are not in the business of providing transportation services).
“The initial 7 years were all about having negative working capital, positive cash flow and a sustained ability to fund our own growth. Those were the only metrics we tracked. In the last 3–4 years, though, I can honestly state that somewhere I lost my path. I started treasuring GMV, room-nights and other ‘vanity’ metrics instead of the fundamentals of cash flow and working capital,” he explained.
Costs incurred in expanding an existing business are generally deductible under Sec. 162 as ordinary and necessary business expenses. For example, if expansion occurs regularly, such as when new restaurant or store locations are opened more or less continuously, most of the related costs would appear to be recurring ordinary and necessary business expenses.
During the growth stage, the life cycle curve is very steep, indicating fast growth. Firms tend to spread out geographically during this stage of the life cycle and continue to disperse during the maturity and decline stages. As an example, the automobile industry in the United States was initially concentrated in the Detroit area and surrounding cities. Today, as the industry has matured, automobile manufacturers are spread throughout the country and internationally.

The rules for recovering the costs of Sec. 197 intangibles are similar to the rules for recovering startup costs, but there are significant differences. One difference is that while a taxpayer may deduct up to $5,000 of startup costs, a taxpayer may not deduct any cost for goodwill or other intangible assets listed in Sec. 197 except through amortization. A taxpayer amortizes the startup costs not eligible for an immediate deduction over 180 months. Likewise, a taxpayer amortizes goodwill and other intangibles listed in Sec. 197 over 15 years (Sec. 197(a)).

A corporation (other than an S corporation) can deduct only 70% of its domestic exploration costs. It must capitalize the remaining 30% of costs and amortize them over the 60-month period starting with the month the exploration costs are paid or incurred. A corporation may also elect to capitalize and amortize mining exploration costs over a 10-year period. For more information on this method of amortization, see section 59(e).
There are, of course, two sides to this coin, with the other involving a risk of expanding too carelessly. While there is no crystal ball and it is very hard to get an idea of what will be the results of your undertakings, you can give yourself the best possible chance of continued success through careful planning. Look at your resources, be realistic about the effort and cost and potential returns, and always keep an expert eye on how expansion might impact the current quality of service you provide your existing customers.
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