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RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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I started a Sole Proprietor LLC Corporation in 2009, which

Customer Question

I started a Sole Proprietor LLC Corporation in 2009, which remained in debt through the end of 2009. I invested more money than I earned for the year. What are my options as far as taxes go? Do I need to file a separate tax return for the corporation? Can I connect it to my personal tax return? Checking for my options. XXX@XXXXXX.XXX
Submitted: 5 years ago.
Category: Tax
Expert:  RD replied 5 years ago.
Did you file for a S election for this LLC? or is this a single member LLC?
Customer: replied 5 years ago.
This is a single member LLC.
Expert:  RD replied 5 years ago.

If it is a single member LLC than you do not need to file a separate tax return. A single member LLC is a disregarded entity and you can file the taxes for the LLC on your Sch C (Personal tax return).



Let me know if you have any question.


Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.


Customer: replied 5 years ago.
Are there any separate forms needed with my personal return? How can I report the gains and losses from the single member LLC?
Expert:  RD replied 5 years ago.

You need to report the LLC activity on Sch C if this is an active business entity. You can provide the entity EIN on Sch C and claim any loss from the business activity on Sch C.


What kind of business was carried on?

Customer: replied 5 years ago.
There were investments made for training, products, rights-to-sell. Which parts and how much of this can I deduct? The money gained was from a separate service that while part of the LLC, was not directly connected to the investments.
Expert:  RD replied 5 years ago.

Any investment made such as right purchased, assets-fixtures, equipments etc will need to the capitalized and depreciated over a period of time. You can claim section 179 write off to write off the entire investment but only if you have sufficient income from the activity. Sec 179 expense is limited to the Business income.


If this is a first year and you are not familiar with these issues than I would suggest you have a tax professional prepare your tax return.



Customer: replied 5 years ago.
I was hoping to not have to hire a tax professional. Your advice to do so in the end makes your service not worth anything at all to me.
Expert:  RD replied 5 years ago.
There are various rules that needs to be adhered to when filing a business tax return for the first year. Assets to depreciate, useful life, Sec 179 writeoff, Start up costs etc... Such details cannot be concluded unless I have the detailed information from you on your business activity. Also, it is a detailed process of reviewing information from you and than analyzing and determining the best course of action.

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