Started a new LLC with a partner, incurred personal expenses, left the business before any business income generated. What is the appropriate way to file these expenses?

chesterbojangles · ‎May 31, 2019

I began an LLC with a partner in 2016, and we filed to have the LLC taxed as an S corp. I incurred personal expenses for business-related activities. Before the business began providing its services and generating income, my business partner and I split, and I incurred personal expenses for legal services used to assist in the split. My former business partner now has 100% ownership of the business.

How do I file all of the incurred expenses on my personal tax return? Is there any particular schedule I must file?

RichardK · ‎May 31, 2019

Since the LLC elected to be taxed as an S corporation, you would follow the S corporation rules.

The S corporation would send you a K-1 for your tax items from the formation of this entity until you left the business.

Then you would take a capital loss for the disposition of your interest, using your basis in the entity, and investment expenses for other expenses not included in your basis.

Started a new LLC with a partner, incurred personal expenses, left the business before any business income generated. What is the appropriate way to file these expenses?

Business & farm