Sch C Business opened & closed same year..

[AZ-Tax]

I think I saw a similar post about this as more of a hobby then a business but this TP's intentions was to start a business but things happen that were out of his control.

Am I asking for trouble from the IRS if I report this on a Sch C with NO gross income?

[ChEAr$]

I think I saw a similar post about this as more of a hobby then a business but this TP's intentions was to start a business but things happen that were out of his control.

Am I asking for trouble from the IRS if I report this on a Sch C with NO gross income?

Back to basics; it all depends on facts and circumstances, not just on intent.
After all, the road to hell is paved with good intentions.

To illustrate, if taxpayer
1. tried to start a business out of his house, did not get a business license or take other affirmative actions to maybe advertise or seek customers, it wasn't really a business.

2. rented a building, put up signs, got a business license, etc, then he could make a good case for schedule c treatment.

[AZ-Tax]

I would lean to #2

Back to basics; it all depends on facts and circumstances, not just on intent.
After all, the road to hell is paved with good intentions.

To illustrate, if taxpayer
1. tried to start a business out of his house, did not get a business license or take other affirmative actions to maybe advertise or seek customers, it wasn't really a business.

2. rented a building, put up signs, got a business license, etc, then he could make a good case for schedule c treatment.

Would be more like #2 for he already purchased an asset he needed to start his business but then sold it when other things didnt come together. Also obatined the necessary licenses. His business was selling hotdogs from a cart near one of our forest so he made several 100 mile RT's to the pak to run his business.

[spanel]

Would be more like #2 for he already purchased an asset he needed to start his business but then sold it when other things didnt come together. Also obatined the necessary licenses. His business was selling hotdogs from a cart near one of our forest so he made several 100 mile RT's to the pak to run his business.

Several trips to the Park and didnt even sell 1 hotdog?!?!


Chris

[oceanlovin'ea]

If he got a license and purchased the cart, I would say he had the intent to run a business. A lot of things could have happened that made the venture fail.

But it does sound like a Schedule C. to me.

Linda, EA

[Davc]

Start up costs for a business that never starts go on Schedule D. Did the TP ever purchase wieners, buns, and condiments?