Tax ramifications on incurred expenses on an unsuccessful business attempt?

-I am working on a tax case where the client is currently an attorney that works as a loan officer at a bank. Job history is 1190-1995, she worked for a law firm (she also represented clients on the side but it was sporadic), from 1995 to 2009, she worked as a loan officer at a bank (which did not require her to be an attorney) and due to cutbacks she was terminated in Dec. 2009. In Jan. 2010 she decided to practice law on her own and she purchased fax machine, copier, computer and printer. She had stationary printed. She also incurred and paid other expenses such as hotel, business meals, postage, supplies, telephone, and car rental for business. She paid for and attended conventions and seminars in order to network. With all this effort, she was unable to obtain even one client. In February, she then decided to take a position that opened up as a loan officer at another bank so at this point, she discontinued pursuing any clients as an attorney.



Now, my struggle with this case is that what exactly is the code section this is dealing with. I know that it has to do with expenses incurred in the attempt to acquire a new business, however, I cannot find the specific authority that explains the treatment of these kind of expenses which most likely will not be deductible since the business was unsuccessful and ceased.



Please help... I need any further guidance, not necessarily the answer.assuming she actually set herself up for business and was available to serve the date of that opening is her business date

anything she invested in the business prior to that is pre opening expenses and can be amortized over a 5 yr period, currently this is now like a 179 deduction in that up to $10000 is allowed as preopening expenses at one time- you can find the code sections in the instructions for 4562

the expenses she incurred once she opened the business would now be her operating expenses and since she didn't get a client would be a loss