| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 147.1 | NOT! | RAVEN1::TMOORE | Ol'Qual Hog | Tue Apr 07 1992 06:46 | 25 |
| "
When you own your own business, it is really amazing how little
taxes you have to pay especially when you can usually deduct
everything under the sun."
Are you asking this as sort of a "Duhh" question or are you serious? My
wife and I have had a small business for 3 years. The sheer discipline that
it takes to keep accurate records,etc. makes any "breaks" worthwhile. By the
way, most common misconception that there is: You can only use the business
losses to offset business gains, IT WILL NOT REDUCE YOUR TAXABLE INCOME
FROM DIGITAL. This applies to such things as rental property which we also
have. I had always heard/believed that I could reduce my AGI with losses
from managing a property (NOT!). All you can do is keep from showing a gain
on the positive cash flow. By the way My brother who owns his on business
was floored at the increased tax rate that he got hit with this year. It
was not a widely publicized increase that was aimed specifically at the small
business person.
" I was thinking of starting a religion based on Darrylism."
Probably the most enjoyable route.
T.Moore
|
| 147.2 | | NOTIME::SACKS | Gerald Sacks ZKO2-3/N30 DTN:381-2085 | Tue Apr 07 1992 11:19 | 11 |
| re .1:
> You can only use the business
>losses to offset business gains, IT WILL NOT REDUCE YOUR TAXABLE INCOME
>FROM DIGITAL.
My wife started a private practice last year. She had a small loss on
schedule C. This was transferred to our 1040, where it offset my DEC income.
I believe the IRS frowns upon "businesses" that lose money year after year.
I don't see why they'd care if business income can't offset "real" income.
|
| 147.3 | Deduct rental losses - NOT not. | CARTUN::TREMELLING | Making tomorrow yesterday, today! | Tue Apr 07 1992 13:22 | 4 |
| If you are actively managing your rental property yourself, it is possible
to deduct rental losses from Sched. E (including depreciation) from your
AGI. Publication 17 is the general guidebook that can point to other more
specific publications.
|
| 147.4 | Business or Hobby asketh the IRS | MCIS2::SCHULMAN | SANFORD | Wed Apr 08 1992 12:09 | 3 |
| It is my understanding that your business must show a profit in three
out of five years. Otherwise, the IRS may interpret your venture as a
hobby and not as a business.
|
| 147.5 | They're the IRS and you're not | 39675::MOCCIA | | Wed Apr 08 1992 14:59 | 9 |
| RE .4
Either 3/5 or 5/7, I can't remember. However, that is a guideline.
The IRS may decide at any time that your business is really a hobby,
reardless of the time elapsed; they're not obligated to abide by
their own rules.
PBM
|
| 147.6 | | NOTIME::SACKS | Gerald Sacks ZKO2-3/N30 DTN:381-2085 | Wed Apr 08 1992 15:35 | 1 |
| Managing rental property a hobby? That's a pretty strange hobby.
|
| 147.7 | | MR4DEC::BMCWILLIAMS | Improvise if you have to ... | Thu Apr 09 1992 14:26 | 8 |
| Didn't the Supreme Court recently rule on this issue? I recall reading about
how a rich husband deducted the thousands he spent trying to promote his wife's
singing career, although she never sang a single gig. The IRS denied it and
said the $$ spent on lessons, etc. was for her personal enjoyment. The Supreme
Court (or whomever rules on these things) over-ruled and said something like
"suffering is not s prerequisite for deductability."
Brian
|
| 147.8 | Rental limited to $25K Loss | OFFPLS::GRAY | | Mon Apr 20 1992 18:31 | 7 |
| RE .3 Deducting losses from actively managed rental property is as
stated in 147.3, and it is no hobby. With interest, depreciation and
taxes alone, it is pretty easy to reach the maximum currently allowed of
$25000. To estimate value, put a $25k loss on your Schedule E line and
recompute your tax. My commercial property is 100% occupied and still
qualifies for a max tax loss. Want a "haven" call me, or start the
cult is probably easier!
|