Hello-

I collected unemployment for all of 2010 in the state of NY.

I realized some modest gains from the sale of stock (less than $1000).

I formed an LLC with some guys I use to work with ... it was a startup of sorts ... filed in Delaware. We made no money and my share of the losses is approx $2000... I have a schedule K prepared.

I voluntarily had NY State the the Federal Gov't withhold from my unemployment check each week.

I am preparing to file my taxes now ... my concern is that somehow i will get in trouble for having started this LLC while collecting unemployment and NY will want the unemployment money back. Is there any reality to these fears? Again I made no money from the LLC and in fact lost money. While I am technically considered an active partner in the LLC, its not a true business yet and did not occupy very much of my time.

Thank you!