How to abandon small business

Forum|Forum|6 years ago
June 4, 2019
1 reply
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I've run a small business for years. At the end of 2015 the business was tentatively abandoned. But, I did not mark the business as closed in 2015 taxes, as I was not sure if the business would remain closed or not. As it turns out, I did zero business in 2016.

Based on the wording in TurboTax I'm unsure if I should just delete the business from the income panel, or if I should leave it in and mark all previous entries: income, expenses, assets, etc. to zero.

Which option would not raise any flags with the IRS?

TurboTax Deluxe Online

Best answer by NancyG

Don't delete your business if it closed sometime in 2016. Instead, report the business and make sure you select I sold (or disposed of) my business in 2016 on the Tell us about your business screen.

Otherwise, follow these instructions to delete a business that transferred over from your 2015 return but is no longer owned by you as of January 1, 2016.

Instructions

With your return open, search for this exact phrase: business (schedule c) (include the parentheses) and then click the "Jump to" link in the search results.
Answer Yes when asked if you had (or want to work on) business income and expenses for 2016.That's right – you'll need to answer Yes, even though it doesn't make sense.
When you get to the Business info or Business Summary screen, click Delete next to the defunct business.
Answer Yes to confirm the removal of all business-related forms.

NancyGAnswer

Employee

Don't delete your business if it closed sometime in 2016. Instead, report the business and make sure you select I sold (or disposed of) my business in 2016 on the Tell us about your business screen.

Otherwise, follow these instructions to delete a business that transferred over from your 2015 return but is no longer owned by you as of January 1, 2016.

Instructions

With your return open, search for this exact phrase: business (schedule c) (include the parentheses) and then click the "Jump to" link in the search results.
Answer Yes when asked if you had (or want to work on) business income and expenses for 2016.That's right – you'll need to answer Yes, even though it doesn't make sense.
When you get to the Business info or Business Summary screen, click Delete next to the defunct business.
Answer Yes to confirm the removal of all business-related forms.

davej

Would the above advice apply if I closed my small business in 2022 and had zero income from it?

I believe all I did in TT was report zero income and closed the business. Does this look right? I will not file the return until april 7th. Thank-you !