How best to 'pause' all sched C expenses?

[snowshoe]

My client didn't operate her business in 2023. We are thinking that it has been more of a hobby.  She had a studio built some years ago & we have been depreciating that building.  She is not quite ready to 'dispose' of the business, however, she'd like to not take any deductions- since she didn't work the business.  She had hoped to wait a year or two & see if she wants to permanently close shop.  How is the best way to handle this?  I have enter NO expenses and changed business % of studio to 1% (which takes no depr & PS won't let me enter 0).  I am just not confidant that this is correct.

Thank You!

[Just-Lisa-Now-]

Changing business use to a low % is about as good as we have for pausing depreciation on a Sch C.

You could enter a disposal date with zero sales price and that will remove the asset from the return, then youd have to add it back if they go back into business.

[Frustrated-in-IL]

If I am understanding you correctly, this is what I do.

Leave the percentages alone.  As Lisa alluded to, at some point you will need put stuff back in.  Who can remember what that will be X number of years from now?  Since this is depreciable real property, I take the undepreciated basis and put it/add it to land.  I make a sub-schedule indicating the amount and date it was done.  That will stop all depreciation.  If it is ever placed back into service, I know what I have to remove and whatever other modifications I will need to do at that time to make things calculate correctly again.

[snowshoe]

Thank you!  I’ll stayed tuned for a couple of days.   I suspect that she has moved into hobby zone & wont be operating a business.   Seems like entering a dispose date & zero sales price would result in a huge loss.   She also has some loss carryover from prior years.  I guess they will just want to studio to revert to personal use.