Closing Business

[DRB]

I closed a single member LLC in June of 2025.  I have remaining, unamortized startup costs of $5,799.  Using TurboTax DeskTop 2025, how do I indicate the business has been closed, and how do I claim the unamortized costs?

[CesarJ]

When a business is closed, any remaining unamortized start-up costs can be fully deducted as a business expense in the year of closure (2025). These costs should be reported under "Miscellaneous expenses" and described as "Unamortized start-up costs on closing of business."

[DRB]

Thank you for your replay to my question concerning closing a single member LLC and reporting unamortized startup costs.  I still have a couple of questions, if you will indulge me.

My Schedule C loss in 2024 for the business I closed was $11,448.  I assume it shows up somewhere as a loss carry-forward.  The loss in 2025 is $3,182, bringing the total Schedule C losses to $14,630.

All the money paid into the business was at risk, and was money already taxed as income in previous years.  Will any portion of the $14,630 be recoverable through the tax process, if I'm informing the IRS that the business is closed?  How do I make this evident on this year's 1040?

Thank you!

Thank you for your help.  I appreciate it!

[CesarJ]

Closing the business doesn't make the loss nonrecoverable. When a single-member LLC (Schedule C business) is closed, any remaining unamortized startup costs are fully deductible in the final year. The total Schedule C loss of $14,630 will flow through your Form 1040 and offset other income,  subject only to normal limitations such as the at-risk rules or the excess business loss rules. If those don't apply to you, the full loss is deductible in 2025

Since you filed Schedule C in the past, closing a business couldn't be easier.  TurboTax will ask you if you disposed of your business during the year. Once answered - there's nothing else to do for your income tax return.  No additional forms are needed.

[DRB]

Again, thank you so much for your help.  I hope I'm not over staying my welcome, but I still need a little clarification.

I've gone all the way through the TurboTax process, and didn't see anywhere where I could indicate I was closing the business.  I'm sure this is just an oversight on my part, but could you point me to where I would make that entry?

What I did see was a question, posed by TurboTax:  "Do you have any Loss Carry Forwards?"  I was surprised by the question.  I definitely have them, both for the business (Schedule C) and for previous investing activity (Schedule D).  I expected TurboTax would pick these up from last year's return, rather than asking me.  Is there someplace I should look to see how TurboTax has or hasn't stored and applied my loss carry forwards for Schedules C and D?

Finally, can my losses, both for the business and for investment activity, be carried backwards?  If my Loss Carry Forwards can only be deductions against future taxable income, I may not recover the losses anytime soon, if at all.  I'm now retired, with only social security and a small IRA for income.  I don't actually reach the thresh hold to owe any taxes.

Again, thank you so much for your help.  I want to get this all correct, and you're such a great resource to help me.  I appreciate you!

[ThomasM125]

You need to update your Business Profile, which is on the screen that says Your (name of business) Business. You will come to a screen that says Lets confirm your Business Info. One of the option says Disposed of business in current year. You need to edit that option to say "yes". 

TurboTax tax will carry your loss carryovers to the current year automatically. You see the question since some users may have not have used the program in the previous year so they would need to enter the loss carryovers in the current year. You will find the business loss carryovers in the section that says Final Details and then Special Situations on the screen that says Your (name of business) Business, as I referenced earlier.

Capital loss carryovers will be found in the Investment Income section and then Capital Loss Carryover. It is in the Wages and Income section.

You cannot carry loss carryovers backwards, accept net operating losses but only in special situations.

[DRB]

I’m still struggling with the Loss Carryover for my closed LLC.  My loss in 2024 was $11,448.  I’m expecting the loss from 2024 will appear on my 2025 return, on both Line 3 of Form 8995 and Line 3 of my Qualified Business Income Deduction Summary for this year, and that the total of both year’s losses will be my Loss Carry-Forward from this year’s return..  The loss from 2024 doesn’t appear on either form, and my Loss Carry-Forward now appears to be only this year’s loss ($3,980).

Should the 2024 loss appear where I’m expecting it, and should the sum of that loss and this year’s loss show as the total Loss Carry-Forward for the closed LLC?  Please let me know, and thank you!