Janitor Bob Posted January 19, 2017 Report Share Posted January 19, 2017 Client informed me that he and a partner started a consulting business in 2016...50/50 partnership. They had start-up expenses (web-site setup, registering the company, etc) and obtained a Fed tax ID#. However, the business never took off and they never did any business. Should a 1065 be filed for the business with K-1s sent to each partner with 50% of the loss. Client does not want to file anything and just forget the entire business idea ever happened. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted January 20, 2017 Report Share Posted January 20, 2017 They can only deduct the loss as ordinary if the business was 'operational' and yes, that's subjective. I think they can take a capital loss for it without filing a 1065. Quote Link to comment Share on other sites More sharing options...
Janitor Bob Posted January 20, 2017 Author Report Share Posted January 20, 2017 will IRS be expecting a return for the business? Quote Link to comment Share on other sites More sharing options...
SaraEA Posted January 20, 2017 Report Share Posted January 20, 2017 Yes. Look at the letter the IRS sent with the EIN. It clearly states a 1065 is due March 15, so they'll be expecting one. They need to file. Mark the box "final" return. If they registered with the state, they have to unregister or they'll be charged annual fees (depending on the state). 3 Quote Link to comment Share on other sites More sharing options...
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