StevenL Posted April 15, 2012 Report Share Posted April 15, 2012 Hello Everyone, I have a client who tried going into business for himself in 2011 without any luck. He did incur expenses for filing for an LLC. He made no money on the business. He wants to deduct the expense for the LLC which I believe he can as a capital loss. The thing I'm not sure about is where would I report this loss on his tax return. Thanks for your help on this issue. I really appreciate it. Quote Link to comment Share on other sites More sharing options...
jainen Posted April 16, 2012 Report Share Posted April 16, 2012 >>tried going into business for himself in 2011 without any luck<< Expenses of an unsuccessful attempt to go into business are not the same as expenses of actually operating a business. According to Section 67(b ) they are subject to the 2% of AGI limit on Schedule A. Quote Link to comment Share on other sites More sharing options...
OldJack Posted April 16, 2012 Report Share Posted April 16, 2012 Well... it doesn't take but one valid business transaction and an actual event to operate as business to qualify for deductions. The real question is did he actually operate as a business in an appropriate business transaction before terminating the business. The fact that he made no income and the business fails in the same year is irrelevant. Quote Link to comment Share on other sites More sharing options...
StevenL Posted April 16, 2012 Author Report Share Posted April 16, 2012 Thanks for the replies. There were no transactions for the business. He only applied for the LLC. He abandoned the business when he got a new job in his field. Quote Link to comment Share on other sites More sharing options...
OldJack Posted April 16, 2012 Report Share Posted April 16, 2012 Agree..1040 Sch-A, Misc Quote Link to comment Share on other sites More sharing options...
StevenL Posted April 16, 2012 Author Report Share Posted April 16, 2012 Great! Schedule A...2% misc it is. Thanks again for your help! Quote Link to comment Share on other sites More sharing options...
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