I was amortizing a franchise fee and stopped doing business at end of yr 3. Can I amortize the remainder of the franchise fee the following year (LLC)?

[MC2018]

The business opened in 2015, closed in Dec 2017.  I was determining whether I should try to get money back from the franchisor in 2018 because I didn't think they did their job, but ultimately decided to abandon the business because it would've been too costly to fight for it.  Can I amortize the rest of the franchise fee in 2018 even though I had no business activity in that year other than communication with the franchisor? 

[Anonymous · Accepted solution]

if you actually made an attempt in 2018 to get back some or all of the franchise fees, then 2018 would probably be the right year.   This is because you would not know how much to write off until the attempt succeeded or failed.  on the other hand if you were only thinking about it, I would amend 2017 because you say that you actually closed your business that year.   

here are some possibilities.  

say you go back and write it off in 2017,  the IRS audits and says 2018. - at least you get the writeoff

say you write off in 2018,  the IRS audits, but after 4/15/2021 (10/15/21 is 17 return extended), and says it should have been in 2017.  2017 is a closed year.  so you lose the deduction completely 

[MC2018]

Thank you for the info.  I have since filed bankruptcy but it hasn't been discharged yet.  Do you think this would impact the recommended course?