Accounting and Trading

W

WhiteOut56

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
 
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.
 
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.
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You answer my ? Like a politician
 
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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