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WhiteOut56

Registered: Apr 2010
Posts: 392

08-22-12 05:27 AM

Lets say you make $200k from a prop firm and get a K1.

You also start a business (form an LLC) that for the year you produce a loss, say $20,000 from all the start up expenses, fees, legal crap, and just the general B.S. that comes w/ starting a business

Can you deduct this $20,000?

----> not sure if this matter, but the business "should" turn a profit next year

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BradTheTrader

Registered: Aug 2012
Posts: 10

08-22-12 03:09 PM

better not start any business if your budget is very limited. Personally i would spend those $20K (if my budget isn't far off, like let's say $30K - $40K) in internet marketing business.

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WhiteOut56

Registered: Apr 2010
Posts: 392

08-22-12 11:23 PM

Quote from BradTheTrader:

better not start any business if your budget is very limited. Personally i would spend those $20K (if my budget isn't far off, like let's say $30K - $40K) in internet marketing business.

You answer my ? Like a politician

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Hurricane

Registered: Jan 2003
Posts: 766

08-24-12 01:29 AM

If you're managing your business on a cash basis, then your start-up costs should be deductible against other income (excluding costs for depreciable/amortizable assets). What the IRS will do is monitor your business P/L over time to evaluate if it was a legitamate attempt at business, a hobby, or whatever. Obviously having profits in future years makes the case that it's a legitamate business.

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