Yes, you should be able to
expense the unamortized amount of the franchise fees in the year you closed the
business (i.e. disposed of the intangible asset) and if it no longer had any
value.
From Publication
535, Business Expenses :
Section
197 Intangibles Defined: Any
franchise, trademark, or trade name.
(As a section 197 intangible,
should be entered as an “Asset” of the business, and is amortized over 15 years
In TurboTax Home and Business, you would enter this under the Business tab, Business
income and expenses (Schedule C), Your Business, Business Assets interview).
Disposition
of Section 197 Intangibles A section 197 intangible is treated as
depreciable property used in your trade or business. If you held the intangible
for more than 1 year, any gain on its disposition, up to the amount of
allowable amortization, is ordinary income (section 1245 gain). If multiple
section 197 intangibles are disposed of in a single transaction or a series of
related transactions, treat all of the section 197 intangibles as if they were
a single asset for purposes of determining the amount of gain that is ordinary
income. Any remaining gain, or any loss, is a section 1231 gain or loss. If you
held the intangible 1 year or less, any gain or loss on its disposition is an
ordinary gain or loss. For more information on ordinary or capital gain or loss
on business property, see chapter 3 in Publication 544.
(If, at the time you closed
the business, the franchise fee ceased to have any value, it would be
considered as a disposition. It would have had no value if it could not be sold
or transferred, or was terminated pursuant to the franchise agreement).
