Question

Business Loss vs Total Income

Forum|Forum|6 years ago
April 12, 2020
1 reply
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For 2018, I had Income from different sources totaling $26,000. My business losses were $16,000. Leaving me with Total income of $10,000. Minus the Std Deduction of $24,000, my taxable income was 0.

Is it possible to claim my business losses as $2000. My Total Income would then be $24,000. Minus the Std Deduction of $24,000, my tax income would still be 0. Then carryover the $14,000 loss to another year?

Not A Product Question

LudwigVan_fan

The short answer is no....you have to claim the business expenses/losses in the year in which they were incurred. If your business losses were $16,000 in 2018, you have to claim them in that year.

Those losses are subject to several rules. First, passive activity losses. Were you active in the business that produced the loss(es)? If so, they you need to look at Net Operating Losses and follow the rules for that.

Here is a link to Publication 536 for 2018 (NOLs)

https://www.irs.gov/pub/irs-prior/p536--2018.pdf

Here is a link to Pub 925 (2018) Passive Activity and At-Risk Rules

https://www.irs.gov/pub/irs-prior/p925--2018.pdf

First, look at the PAL and At-Risk Rules.

Then review the NOL rules.

**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**