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Old 04-02-2016, 11:38 PM
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I am trying to prepare form 1065 for my family business. The LLC was set up 12/1/2015; however we did not begin operations until February 2016. We did incur expenses in December for things such as Legal Zoom, office furniture, office supplies, permits, and a few other expenses to get the business started in the new year. The total was only $4,220 for the month. My question is; is it even necessary to report this small amount of expenses which would then show a loss? Or does the loss need to be reported and then the Schedule K-1's completed for the three members? Any help would be great. Thanks



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Old 04-03-2016, 04:30 PM
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I am trying to prepare form 1065 for my family business. The LLC was set up 12/1/2015; however we did not begin operations until February 2016. We did incur expenses in December for things such as Legal Zoom, office furniture, office supplies, permits, and a few other expenses to get the business started in the new year. The total was only $4,220 for the month. My question is; is it even necessary to report this small amount of expenses which would then show a loss?====>>in general, You may deduct up to $5k in start-up costs in your first year in business; but here you haver non startu p costs,i.e, office furniture or office supplies that you need to depreciate to claim on your LLC return .your Start-up costs are indeed a Page 1 deduction, to be reported on Line 20 (" Other deductions on your form 1065 as the others stated. Sch. K is used to calculate the distributive shares for preparing the K-1s; the start-up costs will already have been deducted, as the total from Page 1, Line 22 is then carried to Sch. K of 1065, Line 1. You can't merely put the costs on Line 20 of form 1065; you MUST also attach a statement to the return which formally elects to expense the costs immediately rather than amortizing them over 15 years. The statement could be typed out on a separate page and read something like this; Election to Expense Start-Up Costs

Pursuant to IRC Section 1.195-1(b), the Taxpayer hereby elects to expense start-up costs in the current year for the amount stated below:

Description of Costs: <legal zoom fee, permits or etc>
Amount to be Expensed: $XXX;however you need to claim office supplies/furniture in different lines on form 1065 as these are NOT starting up/organization costs.



a separate statement if also electing to amortize organizational costs.


Or does the loss need to be reported and then the Schedule K-1's completed for the three members?=======>as mentioned above; in your case, LLCs taxed as other-than-C-corps don't have NOLs, so your LLC losses
, since your business is operated as an LLC or partnership, your share of the business?s losses are passed through the business to your individual return(Sch K1 of 1065) and deducted from your other personal income on 1040



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