We had to close our Franchise due to Covid 19, can I declare the loss of the original investment?

[MinhT1]

Yes.

If you have recorded your franchise fee as an intangible asset, you can expense the unamortized portion in the year you had to close the franchise.

[chrisbear61]

Thank you for the answer, but how can I expense the unamortized portion, I dont know what that means.

[PatriciaV]

Basically, you report the asset as disposed of with no sale. This releases the remaining basis as a write-off (expense) for the year.

[PatriciaV]

Basically, you report the asset as disposed of with no sale. This releases the remaining basis as a write-off (expense) for the year.

[chrisbear61]

Thank you for your answer, can you guide me through it, I am not to sure how to report the asset as disposed? Where do I go on Turbotax to do that, which section?

[DianeW777]

When you are in your business or rental activity you must go to the asset section and then edit this asset to let TurboTax know that you no longer have this franchise fee and that you have disposed of it with a zero sales price (if applicable).

1. Sign into your TurboTax account
2. Select Business Income or Rental Income (depending on the activity associated with your franchise fee
3. Edit beside this asset > Continue to the screen 'Tell Us More About This Asset' > Select 'The item was sold, retired, stolen, destroyed, disposed of....'
4. Select 'Yes, I've always used this item 100% of the time for this business' 
5. Enter your dates - retired and date you started using for business > Continue to the 'Special Handling Required' screen and answer No > Continue
6. If there is no sales price enter nothing > Continue to see your expense deduction that will carry to your expenses on your business or rental.
7. See the image below 

[chrisbear61]

Hello, thank s for your help.

How do I select Business Income, where is that? how do I get there?

[DianeW777]

Since it appears you are using TurboTax Self-Employed Online version this is your Self-employment income on the return.  In that section will be your assets.  Select the asset for your original Franchise Fee, then follow the steps outlined above inside the asset. 

If you have other specific questions please add them here and one of our tax experts will help.

[chrisbear61]

Thank you for your help.

I have another question.

I am trying to remove what I entered previously in the section: Sale of a business property.

I entered -$60000 for the the loss of our Franchise but that was not the right place to enter that but even if I edit, I cannot remove it. Please help.

[RobertB4444]

@chrisbear61  If clicking the little trashcan to the right of the transaction is not removing the sale then try changing all of the numbers to zero.

[chrisbear61]

No it has no trashcan next to it. It is in the section: Your Income and expenses: Sale of a business property.

I tried just about anything and it wont disappear.

[MarilynG]

1. Open or continue your return, search for sale of business property (use this exact phrase; copy/paste if necessary) and then select the Jump to link at the top of your search results.
2. On the Any Other Property Sales? screen, make sure the first checkbox is checked and Continue to the next screen.
3. The next screen, Sale of Business or Rental Property, should display Edit and Delete buttons next to the property in question.
4. Select the appropriate button and follow the onscreen instructions to either edit or delete the 4797.

Click this link for info on How to Edit Sale of Business Property.

[chrisbear61]

Thank you for your help, I did all that and deleted the item and when I return to the main screen that displays: Your income and expenses, it still there at the bottom of the list;

Sale of business property         -60,0000          Edit

I can't get rid of it, please help!

[PatriciaV]

You can try deleting the related form.

1. Open your return in TurboTax online so you can see the Federal Refund or Tax Due box at the top.
2. On the left column click on Tax Tools >> Tools >> choose Delete a Form in the pop-up box.
3. Look for Form 4797.
4. Click Delete and confirm.
5. Click Continue With My Return a the bottom.
6. Go to Federal and confirm the Sale of Business Property is gone.

If not, you will need to contact TurboTax Live so customer service can work with you to remove this sale. See What is TurboTax Live?