Chapter 11Tax Issues
The IRS has rules for business losses because business owners have the opportunity to use losses on their personal tax returns. For example, LLCs and S-corps allow for losses generated by your business to be applied to your personal tax return. This is also known as the pass-through of tax items. The problem with this loophole is that people would create companies and generate losses by those companies. The losses would then flow to the owner’s individual tax return, lowering his or her income taxes. The IRS put a stop to that practice by creating and enforcing Section 183 of the Internal Revenue Code (IRC).
Are You Engaged in a For-Profit Endeavor?
Internal Revenue Code Section 183 (Activities Not Engaged in for Profit) ...
Get Start Me Up! now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
