It is April 30, 2026. Many LLCs are sitting on a goldmine: custom-trained AI models. But very few know how to record this on their balance sheet for a future sale (Article #619).
- The Valuation Method: The IRS is leaning toward the “Cost to Recreate” model for AI IP.
- Capitalization vs. Expense: You must decide whether to expense the training costs now for a tax break or capitalize them to increase the business’s book value for investors.
- The Shark Insight: “If you plan to sell your LLC in the next 24 months, start capitalizing your AI training costs now. A higher ‘Book Value’ gives you more leverage during due diligence. In 2026, your data is your most liquid asset.”