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Hello, my name isXXXXX & I'll be helping you today. My goal is to give you a complete & accurate answer that you can understand.
What was done with the proceeds of the loan?
i invested it in the market in 2007
Well, that wouldn't be a business expense as you had assets to show for the loan proceeds.
Therefore the payments wouldn't be deductible as business expenses. You could deduct the interest expense as investment interest on your tax return.
there were no proceeds i lost the principal
Well then you would have capital losses you could claim whenever you sold the securities.
it was a reverse merger the company never ended up even trading. when things hit in 2008 it shut down the small cap ipo and reverse merger business
if i make 300 dollars and i am paying back 100 can i just file for the 200 on my taxes or do i have to file on all 300
Well, if you invested the loan proceeds in that company, you should have claimed a loss on worthless securities when it became worthless.
No. The 300. would be taxable income.
The 100. would not be deductible.
is there anyway of setting it up that it could be
You see, whatever was done with the loan proceeds is what determines how it is treated for tax purposes.
The loan repayment doesn't trigger a tax event except if there is interest expense involved.
oh so the intrest on the loan can be deducted
Yes, as investment interest expense - an itemized deduction.
and the loos that i had i can apply that to my 2008 taxes
You could have applied it to 2008 but the statute of limitations has run on 2008 unless you haven't filed your tax return for 2008.
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