Personal Finance & Money Asked on December 13, 2020
I run a small repair shop in NYC and this year 2020, I will need to report a loss. I never reported a loss before so I’m not sure if my knowledge of it is out of date or not.
I read that for 2020 returns we can file for "unlimited" loss. But was it previously we were only able to file a loss of maximum of $3000 per a year? Say if I had a business loss of $9000. I can only offset this loss over 3 years at $3000 each year?
What else do I need to know about reporting a business loss? I use taxact to do my own filing.
business losses and capital losses are different. only capital losses in trading assets are capped if they are not offsetting capital gains somewhere else.
a single member LLC passes all expenses to you as deductions, and there is no cap on deductions there. if your single member llc has outside capital via debt or even credit cards or you just used your own savings, you can easily have spent more than you earned, resulting in negative adjusted gross income (AGI)
Answered by CQM on December 13, 2020
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