In the last year of a Sch C business, can allowable expenses (8829, line 35) exceed the normal limitation that would result in a carryover for the excess normally not allowed? If so, is there a code section or reg specifically statng this? The form's instructions are silent.
I don't think you can exceed the normal limitation, even in the final year. I think if you haven't made enough money at the business, you lose the ability to take home office deductions beyond the mortgage interest, taxes, and whatever takes you down to zero profit. I think you lose all your past carryovers, too.
Amy is correct. Those deferred expenses can only be used to offset income. They are not "carried over" like rental expenses.
