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mmarc2000
Level 2

Business expense paid out of pocket for biz sold in prior year

I sold my small business in 2019 (an LLC), filed the final 2019 return (Form 1065) and reported that on my 1040.  Over the years I occasionally paid business expenses out of pocket and deducted those on Schedule E of my 1040.  In 2020 (after the business was sold) I personally paid some final business expenses.  Can I deduct those on Schedule E of my 2020 Form 1040?  Thank you!

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DavidD66
Expert Alumni

Business expense paid out of pocket for biz sold in prior year

Yes, you can report those expenses on your 2020 tax return.  Another option for how to do it would be to file a Schedule C, with no revenue, just the expenses you paid.

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1 Reply
DavidD66
Expert Alumni

Business expense paid out of pocket for biz sold in prior year

Yes, you can report those expenses on your 2020 tax return.  Another option for how to do it would be to file a Schedule C, with no revenue, just the expenses you paid.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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