Tax Year Prior to 2020: 1st yr LLC (filing as Scorp) no income only expenses in '16. Wife is W2 employee so we have net income, can I deduct my business loss on our 1040?

[cheri-dore]

I'm a RE Broker, I opened the business in Q4 2016 and only had advertising, misc. set-up expenses and no income yet.  As I had no income, I also paid myself no salary.  How does this year's loss affect my personal return and next year's business return (1120s)?

[KarenL2]

Yes. You will file the Form 1120S and that will produce a Schedule K-1 showing the loss.  Then, you will enter the K-1 on your personal taxes (Form 1040).  The loss will be deducted against other income reported on your Form 1040.

Next year will start fresh unless there are amortized expenses or depreciating assets that carry over.