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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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My wife and I are co-owners of an LLC, a consulting

Customer Question

My wife and I are co-owners of an LLC, a consulting business. For 2016 we expect to have very little and possibly zero revenue. We will have expenses associated with trying to run the business. Therefore, we anticipate that the LLC will operate at a loss. Is there a limit to how much of a loss we can show on Form 1040?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

First of all - there is No dollar limit for business losses.

However there are several issues to consider...

First of all - we need to be clear that the business has been started. That is important because if the business is not started yet - all expenses are classified as start-up expenses and must be capitalized.

The business is considered as started when you have a product or service for sale.
Thus - it is very important to determine the starting date for your business.

Next issue to consider - if you have other taxable income? If yes - you may use business losses to offset other taxable income - for instance wages.

If however your net income is negative - you have NOL - net operating loss - and NOL may be used for other tax years.

Expert:  Lev replied 1 year ago.

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