Trailing expenses for Sch C or Sch E activity

[mericson2]

When I prepare a return for a client with 1040/Sch C or Sch E activity, a portion of my fees for preparation is a business expense in the year paid. TY21 fees, deductible in TY22, for instance.

How do I handle when the activity ceases? For instance, Rental activity ceases and property sold in TY21. Where can the TY22 business expense be claimed. File Sch E showing only expense of tax preparation?

Appreciate thoughts and thanks for the wisdom of the crown.

[ATSMAN]

I do the billing so that the final Sch C or Sch E includes my last charge related to that. I usually get a heads up the prior year. I changed my method after TCJA enacted.

[Rapid Robert]

This is an issue that tax professionals will have when they retire, since E&O tail insurance will be strongly advised for at least 3 years after last paid return is filed. I don't see a problem with just continuing a Schedule C for those last few years with minor expenses, even with no revenue. Granted you won't get any deduction against your SE tax, but at least you will for income tax.