Do I need to declare anything for a loss making dummy LLC?

Forum|Forum|2 years ago
January 9, 2024
2 replies
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Say I have a dummy SMLLC which is not generating any revenue and in fact generates loss due to ongoing administrative expenses. Do I need to declare anything in my tax return for this?

Not A Product Question

Mike9241

Not sure what you men bt dummy SMLLC, but if it's not an active business the expenses are not deductible,.

siddjain1Author

correct. so in that case (when expenses are not deductible) can I skip filing Schedule C? what will I enter in it anyway? think of it as I am still setting up my business and have no customers.

Rick19744

Employee

If you are in the process of setting up your business, then all your expenses are capitalized as either:

Start-up costs
Organizational costs

Once you begin your business activity, then you will amortize those expenses.

Nothing needs to be filed with your federal tax return until then.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

Carl11_2

Employee

You will not file a SCH C until the tax year your LLC is actually "open for business". All expenses incurred prior to being open for business are start up expenses, and can not be claimed/reported until the tax year you are open for business. It does not matter if the statup expenses were incurred in prior tax years either. Point is, nothing can be claimed until the tax year you are actually open for business.