Tag Archives: keeping good records
Documentation is the key to business expense deductions
If you have incomplete or missing records and get audited by the IRS, your business will likely lose out on valuable deductions. Here are two recent U.S. Tax Court cases that help illustrate the rules for documenting deductions. Case 1: Insufficient records In the first case, the court found that a taxpayer with a… Read More »
To deduct business losses, you may have to prove “material participation”
You can only deduct losses from an S corporation, partnership or LLC if you “materially participate” in the business. If you don’t, your losses are generally “passive” and can only be used to offset income from other passive activities. Any excess passive loss is suspended and must be carried forward to future years. Material… Read More »