Hi. I have a partnership LLC (4 members). We were trying to go into the restaurant business but due to covid, we are still unable to open. We paid for the franchise fee, lawyer, construction, licensing, and machinery already (total $80K incurred expense / capital). From IRS pub 535, I read I can only deduct $3000 as capital loss on my ordinary income b/c my biz failed to launch. I can NOT deduct machinery until I sold them.
My question are:
1. What other start up expenses can be deducted on my tax return? Am I missing anything?
2. Is it the total $3000 for the partnership, or each partner $3000, can be deducted?
3. Can I carry forward the rest? and how many year?
Thank you in advance for your help!
Are you absolutely certain the attempt was unsuccessful? You stated, "still unable to open". Have you completely given up opening the restaurant?
With respect to deductions, those would be any costs you incurred in your attempt to begin this specific business and capital losses can be carried forward indefinitely.