I have a question about reporting LLC losses — Can I report my LLC losses on my personal return?
Whether reporting LLC losses on your personal return is acceptable or not depends on the type of LLC you have.
When 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.
Related Resources
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Is an inheritance considered taxable income? Learn more from the tax experts at H&R Block.
How does the sale of business property affect your taxes? Learn about property classifications and get tax answers at H&R Block.
If your business had no income this year should you still file a tax return? Learn more from the tax experts at H&R Block.
