You could handle the situation either way, with some exceptions.
One option would be to not
report any income or expenses for the sole proprietorship for 2016. Then report it again in a future year when
you have income and expenses.
The other option would be
to continue to report it on your 2016 return showing zero income. You
would need to choose this option if you have a Federal ID number for the
business, if you carry an inventory, if you are depreciating any assets used in
the business, or if you had any expense carryovers from prior years (such as
for a home office limited by business income).
These items need to be carried forward until you officially “close” the
business.