Want to close a Home Business - Walk Away Closeout

[PhoBug]

Hello!  I want to close out my home business.  I have done it for years on Schedule C, and still carry some assets that are partially depreciated.  In 2024, I was non-active; no expenses, no income. My goal is to drop it from my taxes, convert all assets to personal use, and walk away.

For 2023, I filed as normal and did not indicate converting any assets to personal use.  I have no Section 179 deductions, no inventory, no home office, or any other outstanding issue.

For 2024, do I need to do a schedule C?  Or can I simply stop reporting anything (No more Schedule Cs).

If I need to do a 2024 Schedule C and report no earnings/expenses?  When I try to say I converted assets to personal use on 1/1/2024, it is still depreciating the items.  (That doesn't seem right).  If I say 12/31/2023, it will do zero depreciation, but, I am afraid that would be inconsistent with my 2023 filing.

Another option that came to mind: Amend my 2023 taxes to convert assets to personal use on 12/31/2023.  But I tried that and the 2023 depreciation became less, which would make me owe 2023 taxes. that doesn't seem right either.  I tried saying 1/1/2024, then depreciation went to zero -- also not right.

What is the proper method that would be easiest to walk away?  Thanks!

[PhoBug]

UPDATE:  I figured out that if I say the asset was converted to personal use on 1/1/2025, the 2024 depreciation is also zero.  That seems to be the correct answer, since I am not trying to take depreciation in 2024, but it seems strange; why would it calculate zero if it was still a business asset for all of 2024?

If I need to do a 2024 Schedule C, is using 1/1/2025 a good/acceptable way to go?  Thanks again!

[PhoBug]

UPDATE #2:  I now figured out if I put "Business Use %" at 1% ( TT will not allow 0%), and the disposition date at 1/1/2024, then depreciation for each item is zero.  I like this the best; Correct depreciation, and a 2024 end date.

Is this the best solution?  (Again, assuming that I do have to file a 2024 Schedule C). 

[PhoBug]

I think I've been overthinking this.

After running a filing (pdf) printout, there is nothing on there that indicates the business is being "closed", nor any listing of individual assets.  Looking at 2023, there was nothing there indicating individual assets.  So only my TT files know the details of my business assets, what is personal use, and if the business was closed.

SO...  Is the answer to my original question simply "Don't file a 2024 Schedule C" and just ... walk away.     🤔

[PhoBug]

From IRS page:  https://www.irs.gov/faqs/small-business-self-empl[product key removed]ess/schedule-c-schedule-se/sch...

"If your sole proprietorship business has no profit or loss during the full year, it's not necessary to file a Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship) for that year."

I think I've slowly answered my own question.  Since the business had no profit or loss, just don't do a Schedule C, for 2024 – or ever.  But I'd very much like to hear from others.

[AnnetteB6]

Given the circumstances you described, it seems that you have indeed answered your own question.  However, there is one more thing to do in TurboTax to prevent the business information from flowing into your 2025 tax return.

As you go through the business profile where all of the basic information about your business is reported, there should be an input screen that says Tell Us More About Your Business.  On that page, there is a box to check saying that you 'sold or disposed of the business during 2024'.  Be sure to check that box so that TurboTax will not transfer the information forward to 2025.

@PhoBug