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Writing Off Business Expenses & Losses (Personal Tax Return)

Writing Off Business Expenses & Losses (Personal Tax Return)


(dramatic music) – [Toby Mathis] I have loses in a C-Corp. Is there any way to
write it off personally? Jeff what do you think? – [Jeff Webb] Basically no. The loses in a C-Corp
belong to the C-Corp. – [Toby Mathis] Alright, so the losses are stuck at a C Corp, but
here’s one little thing. If you made a 12-44
election on your C Corp, and that is an election to treat it as a small business company, you can write off up to
fifty thousand dollars of Corporate losses on
your personal return when you dissolve the Corporation. That’s a pretty big one. If it is a LLC taxes as a C Corp you lose that, so it has to be attritional C Corp, less than five share holders, and I think less than a million dollars of capitalization. If you’re married filing jointly, you can write off up
to a hundred thousand. – [Jeff] And you have to
be an original shareholder. – [Toby] Yes, be
an original shareholder or original issue. – [Jeff] Original issue yes. – [Toby] Yeah, original issue means that you can’t buy ii from somebody else then write off the losses. So, that’s why there’s
a couple different rules that keeps us from selling
losses in a Corporation. As much fun as it would be . (Jeff laughing) – To buy a Corporation that
has a whole bunch of losses, and say yeah I get a, if your transfer it, if you transfer it more
than 50% that way you’re not able to take the losses don’t carry forward to the new owner. So you actually lose
’em if I’m not mistaken. So that’s number one. So yeah, so C Corp is its own tax. It is a 21% tax rate so it sounds fan, I mean it fantastic, its great. – [Jeff] But if you lose your investment in a C Corporation or
any other type of entity, you can write that off as a capital loss. But you’re going to be writing
it off for a lot of years, most likely. – [Toby] Your going
to be limited to what? – [Jeff] Three thousand a year – [Toby] Yeah, three
thousand per capital loss.

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  1. CAN YOU WRITE OFF YOUR LOSES ON A LLC PARTNERSHIP

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