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Level 3
posted Jan 29, 2025 10:08:39 AM

Income from a failed business relationship

My son had $600 of income from a failed business relationship.   This income was not posted to his DBA.  He doubts that his partner will provide a W-2 or 1099 form.  He also doubts that the partner will send social security or Medicare payments to the IRS.   How should he handle this income?   Also, some of his personal property was destroyed in the relocation from the business site.  Can that loss offset some of the income?  If yes, how is the loss reported?

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1 Replies
Employee Tax Expert
Jan 29, 2025 10:51:02 AM

You son will have to report this income even if he doesn't get a form.  This income is considered self-employment and he can include expenses he had related to the business.  

 

To enter this information in TurboTax:

 

  1. Open your return
  2. Go to Schedule C
  3. Answer Yes to Did you have any self-employment income or expenses? 

You will be able to deduct any expenses that you had related to your work, like the use of your vehicle.  For more information on what expenses can be included, see the TurboTax help article:

 

What self-employed expenses can I deduct?


Regarding the losses your son had:

  • If the property he lost is personal property, he can't deduct a loss unless it was caused by a federally declared disaster.  
  •  If the property he lost is business property, then he could claim the loss of the cost of the property minus any insurance payments, if any he is expecting to receive.  

For more information visit the IRS page Topic no. 515, Casualty, disaster, and theft losses