I have a small farm management business that I will not continue with after 2020. Not selling, just stopping. I had a small amount of income and expense for 2020 that I have entered into my Turbo Tax software. How do I stop the business for 2021? Do I stop it on December 31, 2020 or Jan. 1 2021 when I file for 2021 taxes. I have zero items that I depreciate on a schedule, but I do claim a few miles on a vehicle.
thanks in advance.
@bryankr wrote:
.....I have zero items that I depreciate on a schedule, but I do claim a few miles on a vehicle.
With respect to a sole proprietorship (Schedule C), there is actually nothing you have to do beyond keeping track of any assets that have been converted to personal use (unless you claimed a Section 179 deduction in a prior year, which would be somewhat rare).
With respect to the vehicle, you may have a recapture event but not until you dispose of the vehicle.
Champ,
Thank you for your reply. Do I simply delete my schedule C when I do my 2021 taxes. Just wanting to confirm that I don't need to in some way show stopped the business. I have no assets that I converted to personal use except for the car which I understand on the possible recapture do to mileage deduction.
Yes, in your case you simply would not prepare a Schedule C at all. There is no "final return" box you would need to check as there are on some business returns (e.g., 1065, 1120-S, 1120).