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I own 50% ownership of an LLC in MN. We have expenses in 2022/2023 with no income. Are we required to file expenses on our personal taxes or wait until we have income?

Forum|Forum|2 years ago
March 16, 2024
2 replies
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Tax advice last year was to not include expenses until we have income. Can we include expenses from prior years or will we need to amend when we start getting income?

TurboTax Online

Best answer by Rick19744

This date is based on facts and circumstances.

Have you "opened" the doors for business
Have you begun marketing for sales
Have you begun selling your product

Based on the limited facts, it does not appear you have "started" your business yet.

However, it is not when you start getting income. It is when you begin the process of generating income.

Rick19744

You need to file a return when the trade or business has actually started, regardless of whether you have any income.

If you have not officially started the trade or business, then the expenses are capitalized as either start-up expenses, organizational expenses or possibly fixed assets that will be depreciated once you begin the business.

*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.

J

Jackie2024Author

Can you define “started”? Last year we worked with pattern making and a manufacturer to get a sample order and we’re still working on setting up our payment processing and website. We haven’t sold any products yet. A tax advisor last year said we didn’t have to file anything until we started getting income.

Rick19744Answer

This date is based on facts and circumstances.

Have you "opened" the doors for business
Have you begun marketing for sales
Have you begun selling your product

Based on the limited facts, it does not appear you have "started" your business yet.

However, it is not when you start getting income. It is when you begin the process of generating income.

*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.

A

AmeliesUncle

As a side note, this sounds like a Partnership (Multi-Member LLC). That is a separate tax return and if the business was 'open' in 2023, that tax return was due yesterday.