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Posted by c on April 8, 2008, 11:15 am
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hi all,
i paid $425 to file articles with my state (NY) and to have formation
notification published in local papers (as is required in NY) in order
to form a company that i never got around to doing anything with, and
as such, i have $0 income and only that $425 in losses to speak of
i elected passthrough taxation ... i have a business partner and i
understand any losses/profits we have must be reported on our
individual returns
my partner bought some things for the business that never was and
maybe spent $1000, but he's hiring an accountant to do his taxes so
that's a whole other situation; i just wanted to ask a few questions
about my own situation
if i file a 1040, as i understand it, i'll need to include a negative
$425 on line 12, based on listing those "expenses" (sorry to use that
word if it means something else at times in this context) on schedule
C, yes?
is that all i need to do for my personal return? do i need to include
a 1065?
what do i need to file for the company itself, if anything?
will there be taxes due even though we had no income?
thanks much!
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Posted by c on April 8, 2008, 12:16 pm
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> hi all,
>
> i paid $425 to file articles with my state (NY) and to have formation
> notification published in local papers (as is required in NY) in order
> to form a company that i never got around to doing anything with, and
> as such, i have $0 income and only that $425 in losses to speak of
also - i just found a piece of paper from the irs saying i have to
file a 1065 by june, though a 941 is due by april 30 (quarterly
return)
and one other thing ... i never sent in the affidavits i paid for from
the newspapers ...
this might sound like a legal question instead of a tax one, but: if
i'm required to submit those affidavits in order to have a duly-formed
LLC, and i don't, then do i not have an LLC, such that if i don't send
in those affidavits i can forget the whole thing? not be the owner of
a derelict LLC and not have to fill out any forms and not have to pay
any taxes on a company that doesn't exist?
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by removeps-groups@yahoo.com on April 8, 2008, 12:56 pm
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> i paid $425 to file articles with my state (NY) and to have formation
> notification published in local papers (as is required in NY) in order
> to form a company that i never got around to doing anything with, and
> as such, i have $0 income and only that $425 in losses to speak of
>
> i elected passthrough taxation ... i have a business partner and i
> understand any losses/profits we have must be reported on our
> individual returns
>
> my partner bought some things for the business that never was and
> maybe spent $1000, but he's hiring an accountant to do his taxes so
> that's a whole other situation; i just wanted to ask a few questions
> about my own situation
>
> if i file a 1040, as i understand it, i'll need to include a negative
> $425 on line 12, based on listing those "expenses" (sorry to use that
> word if it means something else at times in this context) on schedule
> C, yes?
You formed a corporation or LLC, right? In that case, the corporation
should file a form 1120 (C Corp) or 1120-S (S Corp). An S corp would
issue a Schedule K1 to each of the shareholders. If each of you owned
50% of the company, each of you would have a loss of 425/2=212.50.
Since you are active participants, the loss would go on Schedule E and
line 17. Schedule C is for sole proprietorships (so hard to spell
that word!).
> will there be taxes due even though we had no income?
Not for federal. But state may have income. CA for example has a
minimum tax of $800 except for the first year (maybe first 2 years,
but I'll have to check on that). Check with NY. Maybe someone else
will write.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by c on April 8, 2008, 2:12 pm
Please log in for more thread options On Apr 8, 12:56 pm, "removeps-gro...@yahoo.com" <removeps-
gro...@yahoo.com> wrote:
> You formed a corporation or LLC, right? In that case, the corporation
> should file a form 1120 (C Corp) or 1120-S (S Corp). An S corp would
> issue a Schedule K1 to each of the shareholders. If each of you owned
> 50% of the company, each of you would have a loss of 425/2=212.50.
> Since you are active participants, the loss would go on Schedule E and
> line 17. Schedule C is for sole proprietorships (so hard to spell
> that word!).
>
actually it was an LLC, and i understood that we could count the LLC
as a passthrough entity for tax purposes
> > will there be taxes due even though we had no income?
>
> Not for federal. But state may have income. CA for example has a
> minimum tax of $800 except for the first year (maybe first 2 years,
> but I'll have to check on that). Check with NY. Maybe someone else
> will write.
alright, will look into that
responding to you other post:
>One more thing. That 1k may also be deductible. If you used it to
>pay for meals, then that might raise eyebrows. What kind of stuff was
>it? If it was supplies that you now use for personal use (like
>stamps, plain stationary) then no deduction. And fees you pay an
>accountant to do your 1120* would also be deductible.
he spent that cash, probably $1k, on computer equipment/services that
is not used for personal use (ever)
he actually just called me and said his accountant told him that since
we aren't actually in business (yet?), the money he spent counts as an
investment and not an expense, and thus is not deductible?
this is getting more and more confusing
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Katie on April 8, 2008, 3:22 pm
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> >One more thing. That 1k may also be deductible. If you used it to
> >pay for meals, then that might raise eyebrows. What kind of stuff was
> >it? If it was supplies that you now use for personal use (like
> >stamps, plain stationary) then no deduction. And fees you pay an
> >accountant to do your 1120* would also be deductible.
>
> he spent that cash, probably $1k, on computer equipment/services that
> is not used for personal use (ever)
>
> he actually just called me and said his accountant told him that since
> we aren't actually in business (yet?), the money he spent counts as an
> investment and not an expense, and thus is not deductible?
>
> this is getting more and more confusing
>
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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