Thank you very much for your comment! These expenses are recorded as deductions on the book so entering it in the schedule L would create the difference with the book. In this case, should I make an M-1 adjustment for this amount? (Enter as Startup cost to "expense recorded on books not deducted on this return") In this way, the Sch L stays consistent with the book, but I'm not sure if this is the correct way. Also, the asset is below $250K so it is not required to provide BS/M-1, but should I make sure to attach BS/M-1 to be clear?