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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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My businesses franchisor went belly up last year. No problem,

Resolved Question:

My businesses franchisor went belly up last year. No problem, I have continued business easily without them. But I had a ten year franchise and I am now 6 years in. Over the last 6 years I have been depreciating the cost of the franchise on my business taxes. Should I continue to depreciate the remaining 4 years as I have done in the past or should I write off the remaining 4 years as a loss over however many future years it takes to realize the full financial tax benefit of it.
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.
Hello seven,

Whatever you paid for franchise fees should continue to be depreciated during the remaining 4 years.

The fact that this company has gone out of business does not change what you initially paid for franchise fees, and does not change the method you use in depreciating this cost.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you.
Merlo and 2 other Tax Specialists are ready to help you
Customer: replied 7 years ago.
Well that is what I figured, but I feel much better hearing it from an expert. Thanks for your prompt response.
Expert:  Merlo replied 7 years ago.
Hello again seven,

Thanks for using JA. Let us know if you have more questions.

If this was helpful please press the Accept button.

Thank you!

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