Thank You to you each for helping me understand. I appreciate the time you each took to explain with helpful information.
It seems that I misunderstood the difference between personal money used to open the business (beginning basis) and having an un-collected debt from not my wife nor myself- such as an un-collectable invoice from a customer.
To make sure I understand:
Since the 1,000.00 was used to open the business, it is not a bad debt, but rather it is part of my basis in the company. Therefore it should have been included in the ongoing basis calculations. The end result is that my ending basis was 1,000.00 less than it should have been.
As far as hiring a tax professional; that is who has been doing the returns. However, the CPA made herself unavailable when the IRS questioned things on a previous year's return that she prepared, so I handled the closing of the business myself.
I'll be certain not to include the 1,000.00 as a bad debt on our personal income tax returns.
Thanks Again All!
Paul
