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Ask Lane Your Own Question
Category: Tax
Satisfied Customers: 12440
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I want to close/GO out of business, my company is an llc. Will

Customer Question

I want to close/GO out of business, my company is an llc. Will I be able to preserve the losses for future offset?
Submitted: 2 years ago.
Category: Tax
Expert:  Lane replied 2 years ago.
Hi,.Yes, because the LLC is a disregarded entity (and a passthrough) this NOL is yours to use against other household income..All you have to do is follow the NOL rules..Step 1. Complete your tax return for the year. You may have an NOL if a negative figure appears on the line below:Individuals -- line 37 of Form 1040.Estates and trusts -- line 22 of Form 1041.If the amount on that line is zero or more, stop here -- you do not have an NOL.Step 2. Determine whether you have an NOL and its amount. If you do not have an NOL, stop here. of course.Step 3. Decide whether to carry the NOL back to a past year or to waive the carryback period and instead carry the NOL forward to a future year.Step 4. Deduct the NOL in the carryback or carryforward year. If the deduction is equal to or less than your taxable income without the deduction, stop here -- you have used up your NOL.Step 5. Determine the amount of your unused NOL. Carry over the unused NOL to the next carryback or carryforward year and begin again at Step 4.Note. If your NOL deduction includes more than one NOL amount (a loss for other years) , apply Step 5 separately to each NOL amount, starting with the amount from the earliest year.
Expert:  Lane replied 2 years ago.
Buy the way, be sure to dissolve the LLC with your secretary of state, to be sure you don't continue to have any future annual report or tax issues.
Expert:  Lane replied 2 years ago.
By the way, the carryback period is two years, unless it's from theft or casualty..To recap, iIf you have other income, your business loss first applies to reducing this income in the current tax year. If you had $20,000 in W-2 income from an employer, $2,000 in passive interest income, and $18,000 in business losses, you would pay tax on only $4,000 of income, or $22,000 minus $18,000..But THEN, to your question, if your loss is MORE than the income you can either carry back 2 years or waive the carry-back and carry only forward..Finally, to waive the carryback, attach a statement to your original return filed by the due date (including extensions) for the NOL year. This statement must show that you are choosing to waive the carryback period under section 172(b)(3) of the Internal Revenue Code..If you filed your return timely but did not file the statement with it, you must file the statement with an amended return for the NOL year within 6 months of the due date of your original return (excluding extensions). Enter “Filed pursuant to section(###) ###-####2” at the top of the statement..Hope this helps.Lane.Is this has helped, I'd appreciate a positive rating using the stars at the top of your screen. That's the only way I'll be credited for the work here.
Expert:  Lane replied 2 years ago.
... just checking back in to see how things are going.
Sorry for the data-dump ... just wanted to cover all the bases for you.
But yes, you do get to use the loss in other years.
Hope this has helped...
I this has helped I'd appreciate a positive rating … (by using the stars or smileys on your screen) - That's the ONLY way I can be credited for the work here.