Going Into Business When you go into business, treat all costs you incur to get yourbusiness started as capital expenses. Capital expenses are a part ofyour basis in the business. Generally, you recover costs forparticular assets through depreciation deductions. However, yougenerally cannot recover other costs until you sell the business orotherwise go out of business. Business start-up costs.Start-up costs are costs for setting up an active trade or businessor investigating the possibility of creating or acquiring an activetrade or business. Start-up costs include any amounts paid or incurredin connection with any activity engaged in for profit and for theproduction of income before the trade or business begins, inanticipation of the activity becoming an active trade or business. For more information, see Going Into Business in chapter 12 of Publication 535.