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bowhunter1991---
New Member

I made no sales with my small business do I leave line 1 of schedule c blank?

I already filed my taxes and left the schedule c line 1 blank because I did not have any sales in 2017 but I still had expenses (county taxes for the business) which I did enter on the correct lines.    

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Accepted Solutions
DianeW
Expert Alumni

I made no sales with my small business do I leave line 1 of schedule c blank?

If you had no sales or income from your business, then Schedule C, line 1 would be blank.  Below is some information about the guidelines the IRS uses to determine what type of activity you have.

The Internal Revenue Service (IRS) reminds taxpayers to follow appropriate guidelines when determining whether an activity is a business or a hobby, an activity not engaged in for profit. ... Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.  

The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year — at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses.  It's customary for the business to take time to reach a profit in the first couple of years. 

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4 Replies
DianeW
Expert Alumni

I made no sales with my small business do I leave line 1 of schedule c blank?

If you had no sales or income from your business, then Schedule C, line 1 would be blank.  Below is some information about the guidelines the IRS uses to determine what type of activity you have.

The Internal Revenue Service (IRS) reminds taxpayers to follow appropriate guidelines when determining whether an activity is a business or a hobby, an activity not engaged in for profit. ... Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.  

The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year — at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses.  It's customary for the business to take time to reach a profit in the first couple of years. 

bowhunter1991---
New Member

I made no sales with my small business do I leave line 1 of schedule c blank?

Thank you very much for the information...
DianeW
Expert Alumni

I made no sales with my small business do I leave line 1 of schedule c blank?

@bowhunter1991!!! You're welcome!
SoLostHELP
Level 2

I made no sales with my small business do I leave line 1 of schedule c blank?

@DianeW 

 

in 2016 i showed a loss on my schedule C and in 2017 i had no sales but only expenses. i ended up closing my business feb of 2018.  I did not report a schedule c to my 2018 tax return because i officially closed the business with the state board of equalization in feb 2018.  HOWEVER, i was recently told i should amend my 2018 taxes to zero out my inventory.  but I've also been told that if you don't report a schedule c anymore then the IRS will assume the business is dissolved.  

1) IF, i do need to amend and zero out the inventory, what is the best way to do it so that i can use the loss as a tax write off?  I have not yet decided if i will donate the inventory, sell for pennies on the dollar, or what to do yet but i will do what makes the most sense for the best tax write off (approx $14k worth of inventory)

2) Since i actually haven't disposed of the inventory yet then do i report it the year i actually dispose of it even though my business has been closed since early 2018?

3) if that is the case then do i need to continue filing schedule C each year with no activity but just to carry the inventory over year after year until i dispose of it?

4) LASTLY, with amending 2 years in a row trigger an audit?

 

thank you so much for your help!

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