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Finally, the answer to a question I've pondered for the past year. How can they know whether i'm living on profits or savings.....RIGHT ON
You can click the link, but my query was about how long a business can remain unprofitable, especially when you are living on something. You just have to prove that what you are living on is not income or profits from the business....duh!
Turbo Tax answered as follows:
"You can claim a loss in 2008 but claiming a business loss is always an audit risk be sure to have all the receipts for the expenses you are claiming and business logs for auto and other business activities. Also be able to show the IRS where the money is coming from to live on. Money that is used for living expenses may be considered income by the IRS if you can not show the source was from loans, savings or gifts from family"
Friday, April 10, 2009
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