Whether reporting LLC losses on your personal return is acceptable or not depends on the type of LLC you have.
See Also
Depreciation & How it Affects Your Business | The HartfordI have a question about how to file business taxes with no income -- Is filing business taxes with no income necessary?How to Deduct Business Meals in 2023: Ultimate Guide2023 Tax Deduction Cheat Sheet and LoopholesWhen reporting LLC losses if you solely own the LLC, which isn’t a corporation:
- File Schedule C to report income and expenses.
- A Schedule C loss can offset other income on your personal return.
If your LLC has multiple owners and isn’t a corporation:
- The LLC must file Form 1065: Return for Partnership Income.
- If you have sufficient basis in your LLC ownership interest, reporting LLC losses on your personal return is acceptable.
If your LLC is an S corporation:
- The LLC must file Form 1120-S.
- If you have sufficient basis in your LLC ownership interest, you can claim a LLC loss on your personal return.
If your LLC is a C corporation:
- The LLC must file Form 1120.
- Since a C corporation is a separate taxable entity, profits and losses don’t flow to your personal return. So, you can’t claim a LLC loss on your personal return.
