business deductions after close of business?

[Kea]

Client had a restaurant business (LLC) that closed in 2009. However they are still paying back the business loans. It is business interest but there is no more business return (Final K-1s were issued). Can this be deducted somewhere on their 1040? If so, where? Can I show it on Sch E even though there is no K-1 or EIN -- or use old EIN? Start a Sch C with just interest & tax prep fees?

Thanks.

[Maribeth]

Client had a restaurant business (LLC) that closed in 2009. However they are still paying back the business loans. It is business interest but there is no more business return (Final K-1s were issued). Can this be deducted somewhere on their 1040? If so, where? Can I show it on Sch E even though there is no K-1 or EIN -- or use old EIN? Start a Sch C with just interest & tax prep fees?

Thanks.

The character of the expenses does not change because the business stopped operations. Wherever you deducted the expenses before is where you will deduct them now.

Maribeth

[Kea]

So I can put them on Sch E. (I do like that better than using Sch C.) Do I use a "fake" K-1 and show the old EIN and business name?

Thanks so much

[Maribeth]

So I can put them on Sch E. (I do like that better than using Sch C.) Do I use a "fake" K-1 and show the old EIN and business name?

Thanks so much

I would probaby use a title such as Prior LLC expenses or something such as that. You could also put the expenses on 4797. But either way, they continue to be business expenses.

Maribeth

[Kea]

I had been pretty sure they had to count "somewhere." But could see the argument about no business = no deduction.

Thanks so much. This will help my client quite a bit!!