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Do I need to file a Form 1065 for a multi-member LLC if the business has not yet opened and is still under construction for 2021? Do I claim lease/build-out expenses now?

Forum|Forum|4 years ago
March 20, 2022
1 reply
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My husband and I are starting a business and obtained multi-member LLC in 2021. No gains or losses and leasing a stand-alone unit in a town center. Unit is still under construction but expenses are paid for leasing and construction in 2021, and business cards, etc. The business is not yet open.

TurboTax Self Employed Online

Best answer by ZoltanB45

You would prepare the return, to include rent and the costs such as the marketing (business cards). However, the leasehold improvements would not be deducted until the business began operating.

Z

ZoltanB45Answer

You would prepare the return, to include rent and the costs such as the marketing (business cards). However, the leasehold improvements would not be deducted until the business began operating.

A

AFoD2021Author

Thank you @ZoltanB45 for the help and reply! We paid only the down payment in 2021 so far to our contractor for the build-out. We should not claim this yet as an expense on the 2021 return?

PatriciaV

Employee

The down-payment to your contractor is part of the business asset you are creating. The total cost will be capitalized for depreciation once the unit is placed in service (ie: you are open for business).

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