The three/four major things necessary for closing a SCH C business.
-End of Year inventory balance must be zero. This can be done by indicating all remaining inventory was removed from the business for personal use.
-All assets listed in the Business Assets section must be either sold or disposed of somehow by the business. It's common for unsold assets to be shown as "removed for personal use".
- If the business had any vehicle use for any year it was open, even if that business use was less than 100%, you must show the disposition of that vehicle. Typically this is done by showing the vehicle as removed from the business for personal use.
- Cash value of the business needs to be zero. This can be done by removing any remaining balance in the business as an "owner's draw". This may not be reflected on the tax return per-se. But the final draw from the business bank account to close that account would be shown on the books as an owner's draw.
