Sch E? Sch C? NO Sch?

[Possi]

My client had an S Corp. It was closed in 07 and the final return was done.

He still had office space rented which he sub-let out, and the person he sub-let to stiffed him.

He paid $7355 to pay out the lease.

Shouldn't this have been addressed on the corp return? I don't think it belongs on his return at all, but maybe I am wrong.

Anyone?

[AZ-Tax]

Stiffed him !!!

I only thought that took place in AZ. : )

[Gretel]

My client had an S Corp. It was closed in 07 and the final return was done.

He still had office space rented which he sub-let out, and the person he sub-let to stiffed him.

He paid $7355 to pay out the lease.

Shouldn't this have been addressed on the corp return? I don't think it belongs on his return at all, but maybe I am wrong.

Anyone?

If the lease remained in the corp. name I would agree with you that it belongs with the corporation. Or did he change the lease into his personal name?

[Possi]

personal name

I believe he changed the lease to his personal name when the Corp closed. He was not released from the contract.

[Gretel]

Then it looks like a rental loss on Sch. E.

[S T]

Guarantee

You t/p might have had to personally guarantee the lease as well. So when the S corp closed, he was also responsible party, personally.

Sandy

[Possi]

that's what happened...

He was personally responsible.

So I take the loss on Sch E?

Rental expense and no income?

That's going to look real strange....

[S T]

Well I have a few times

So since it is a sublease that he personally guaranteed, would it be Schedule E, no income, since the sub lease stiffed him, with a note to that effect, and then a deduction for the amount he paid.

Probably not addressed on the Corp return, since he personally guaranteed and the S Corp closed?

Is the S Corp closed and final return filed?

Thoughts

Maybe someone else will jump in.

Sandy

[Lion]

Closed

I had an LLC/partnership that closed but had some trailing expenses the following year or two to close out. Can't remember where I researched, but ultimately put expenses on Schedule E page 2 as you would for unreimbursed partnership expenses labeled something like ABC LLC Closing Expenses. I can't remember why I went to the kitchen a few minutes ago, so don't trust me to remember why I reported the way I did.

[BHoffman]

Along the same line, I am staring at a client worksheet with no rental income and he wants to take the expenses and I am wondering what to do. The house has been available for rent but not formally advertised. "For Rent" sign in the yard. Suppose that's good enough?

Possi, I would take the expense on Sch E and be done with it.

[Possi]

Yes

Along the same line, I am staring at a client worksheet with no rental income and he wants to take the expenses and I am wondering what to do. The house has been available for rent but not formally advertised. "For Rent" sign in the yard. Suppose that's good enough?

Possi, I would take the expense on Sch E and be done with it.

I would take the house for rent expenses, and have many times. No doubt on that one, as long as it passed the rules for "available to rent."

I will do exactly that with my issue.... take it on the Sch E and run....

gracias!