Hi,....I'm not sure I understand you question completely, but you are right....If the business is not yet operating there are no losses that be taken....Now, if the person is saying that he/she believes that the business has failed and will never be profitable, that person CAN take a capital loss
on their investment, BUT would no linger be an owner....AND no longer be able to reap any future profits....Once an business owner writes off their investment in the business as a tax loss they are no longer an owner....Could you maybe clarify what you meant by "The person has said the money is gone and paid out in taxes?"...Thanks, I'll be here, and we can go from there....Lane......I hold a law
degree, (concentration in Tax Law, Estate law & Corporate law
), an MBA, (specialization in finance & tax), as well as CFP and CRPS
designations. - I’ve been providing financial, Social Security/Medicare
, estate, corporate, both for-profit and non-profit
, and tax advice, since 1986.