Here's how to close you business correctly. Handling the inventory is half way down in italics.
TurboTax
will ask you if you disposed of your business during the year. If you closed
your business just by stopping operations, there is nothing else to do for your
income tax return.
However,
if you sold the business to someone else, TurboTax will guide you through the
disposition process and include the transaction on your income tax return.
To
get back to your business to do that:
·
Type “Schedule C” in the Search box.
·
Select the “Jump to” link.
Things
get a little more complicated if your business involves assets, or large
purchases for the business.
Even
if you dispose of the business in a single sale to one buyer, the IRS requires
you to separately determine the value of each asset—furniture, fixtures,
equipment—so that each is treated properly for tax purposes.
Determining
the assets’ market value allows you to calculate whether there is a taxable
gain or loss in each case. TurboTax allows you to easily do this:
·
With your return open, search for this exact
phrase: business (schedule c) (include the parentheses)
·
click the "Jump to" link in the
search results.
In
Business Profile, select to edit "sold business in current year"
and select the option for "I sold (or disposed of) my business in 2016".
Then select NO and click Continue. Click Continue again.
Now
work through "Inventory/Cost of Goods Sold" or product that you had
for sale. If your end of year balance is not zero, then you must zero it out by
indicating that you removed all inventory for personal use or sold it.
If
you claimed "any" vehicle expenses at any time for any year(s) you
had this business, then you must work through the Vehicle Expenses section to
indicate that you removed all vehicles used from this business to personal use.
Finally
, work through
Business Assets. You must work through them one at a time and indicate the
disposition of that asset by checking the box next to "The item
was sold, retired, ...". (See the attached screenshot below. Click to
enlarge.)
Follow
along the interview.
On
the "Enter Asset Sale Information" screen, enter the Sales
Price. (See the attached screenshot below. Click to enlarge.)
Only
once you've accounted for the disposition of all assets, vehicles, unsold
product, and claimed all taxable income of the business (if there was any in
2016), the profit or loss of each will be automatically transferred to the
correct forms for you.
