Schedule C Necessary?

[rfk]

Hello All,

If a small business started business in late Sept. 2007, and there is definitely a loss, is it really necessary to file a return this year? There is capital equipment, grand opening expenses, and other incidental inventory and related items. What is the opinion of the board in regard to this need?

Thanks for comments.

RFK

[veritas]

To report a loss

Which can offset other income or create an NOL to offset income in other years. To keep from getting letters. To record depreciation which is allowed or allowable. To bill the client so you can pay your bills.

A couple that come to mind.

[erchess]

Assuming Sch C is his only income

then no he is not required to file. However before continuing to work with this client I would have to have a believable story of how he paid the expenses and indeed how he ate, put gas in his car, put a roof over his head, and so on. Assuming he passed that test, I would file his return in order to generate the Net Operating loss. That could erase taxable income in more prosperous years starting with 2004 or if elected starting with 2008.

[veritas]

If I was an OLDEA

I guess i would have to leave now.

[BP.]

I guess i would have to leave now.

Understood . . . but you're not, so you won't, right???