Closed Sole Proprietor business in 2022 with carry over losses

[cpaskett]

I closed my business in 2022 and reported as closed.  When filing my taxes for 2023 I am showing carry over losses.  No business was conducted in 2023 so no income or expenses to report.  How do I handle the carry over losses in Turbotax?

[ThomasM125]

You may want to do some research to find out what the losses represent. It is possible they could have been deducted when you closed the business, such as unused depreciation on assets that became worthless, unsold inventory or passive losses. If so, you may be able to go back and file an amended return to claim the losses against prior year income.

If you determine that the losses are no longer deductible, you can try deleting the associated forms, which might be schedule C (business tax return), form 8582 (passive losses) or the asset entry forms for business assets.

Follow these instructions:

1. Choose the Tax Tools option on your left menu bar

2. Choose Tools

3. Choose the Delete a form option under Other Helpful links 

[Mike9241]

are you asking about regular losses or QBI loss carryover? Generally, it's unusual for a sole proprietorship to have regular loss carryovers because business losses would be applied against other income. If adjusted gross income is negative that loss becomes a Net Operating Loss not reported on schedule C. Passive losses when you are the only one involved (except real estate rental which would normally be on schedule E) seem illogical. Loss suspension due to at-risk limitations also seems illogical.   so what I suggesting is that if a regular loss carryforward you're talking about, something may have been done wrong in a prior return. However, it's entirely possible to have a QBI loss carryover - different rules. That loss c/o is a forever carryover unless the law changes.