TurboTax 2019 Home and Business. Dissolved busines...
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New Member

TurboTax 2019 Home and Business. Dissolved business Jan 1 2019. Am wanting to use it solely for short form standard deduction?

 
2 Replies
Level 15

TurboTax 2019 Home and Business. Dissolved business Jan 1 2019. Am wanting to use it solely for short form standard deduction?

There is no longer any such thing as a "short form". There's the form 1040 and that's it.

If you disolved your business on Jan 1 2019 then you need to show that on your 2019 tax return. Assuming this was a SCH C business, here's how to complete the "final" SCH C for this business. This is particularly important if your business claimed "any" vehicle use (even if less than 100% business use) and/or had any business assets. You "must" show the disposition of all business assets, your end of year inventory balance *MUST* be zero, and the end of year cash balance "MUST" be zero in order for the IRS to considered your business closed/dissolved.

Closed SCH C Business

You need to report your business as "sold or otherwise disposed of".

Start working through your business "as if" you still own it. On the 2nd or 3rd screen in select the option for "I sold, closed or otherwise disposed of this business in 2019". If prompted for the date, enter the day after you last day of business in 2019.

If your business had no income in the tax year, you can not leave the business income section blank. You 'must' enter a digit, even if that digit is a ZERO.

If you had no business expenses, then you can leave that blank and don't even have to work that section through, if you don't want to.

If your business carried an inventory, the end of year (EOY) inventory must be zero. If it's not, then in the COGS section (Inventory/Cost of Goods Sold) indicate that you removed the entire remaining inventory for personal use. That effectively makes your EOY inventory balance, zero.

If your business had assets, then you must show the disposition of those assets. In the Business Assets section work through each individual asset on at a time, and select YES on the screen, "DId you stop using this asset in 2018?". Then on the next screen, "Special Handling Required?" if you sold the asset, select no and you will be prompted for your sales information on that specific asset. If you did NOT sell the asset, click the YES button. You must do this for each individual asset listed, even if it's already fully depreciated.

If you claimed any vehicle expenses in your business at any time from the day you opened your business, then you must most show the disposition of that vehicle. Work through the Business Vehicle Expenses section and indicate that you stopped using that asset in the business, when prompted. Then show your disposition of that vehicle. Most likely, you'll indicate that it was removed for personal use.

Once you have done all the above, that will make the 2019 tax year the last year you will file a SCH C for this specific business.

 

New Member

TurboTax 2019 Home and Business. Dissolved business Jan 1 2019. Am wanting to use it solely for short form standard deduction?

Thank you very much. The return's discrepancies were all fixed after following your instructions.

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