Question

I have a question about reporting LLC losses — Can I report my LLC losses on my personal return?

Answer

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 Topics

Related Resources

Bitcoin, Taxes, and the Modern Entrepreneur | H&R Block

Many entrepreneurs find themselves wondering exactly how Bitcoin is taxed. Our H&R Block Tax Pros are prepared to assist self-employed filers with Bitcoin taxation.

Taxes in the Gig Economy

The gig economy and taxes go hand-in-hand. If gig work is your primary form of income, review these important tax tips from our H&R Block tax professionals.

Direct Sellers and Taxes – How Does it Work?

Many are surprised to learn that even side gigs come with a tax price. H&R Block Tax pro's have arranged expert tips for those who owe direct sales taxes.

Understanding Your Closing Disclosure | H&R Block

What is a closing disclosure? When you buy a house, you will receive a closing disclosure that can benefit you at tax time. Learn more at H&R Block.