Publication 535 |
2000 Tax Year |
Circulation Costs
A publisher can deduct as a business expense the costs of
establishing, maintaining, or increasing the circulation of a
newspaper, magazine, or other periodical. For example, a publisher can
deduct the cost of hiring extra employees for a limited time to get
new subscriptions through telephone calls. Circulation costs are
deductible even if they normally would be capitalized.
This rule does not apply to the following costs that must
be capitalized.
- The purchase of land or depreciable property.
- The acquisition of circulation through the purchase of any
part of the business of another publisher of a newspaper, magazine, or
other periodical, including the purchase of another publisher's
circulation list.
Other treatment of circulation costs.
If a publisher does not want to currently deduct circulation costs,
the publisher can choose one of the following ways to recover these
costs.
- Capitalize all circulation costs that are properly
chargeable to a capital account.
- Amortize circulation costs over the 3-year period beginning
with the tax year they were paid or incurred.
How to make the choice.
You choose to capitalize circulation costs by attaching a statement
to your return for the first tax year the choice applies. Your choice
is binding for the year it is made and for all later years, unless you
get IRS approval to revoke it.
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