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Author: gurdison Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121477  
Subject: Re: Family help on home purchase (Long) Date: 1/17/2002 7:29 PM
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<You might want to stop being quite so aggressive with your business deductions -- give yourself an income so that you can use it to save and invest. Sure, you'll pay taxes on it -- but in the long run your financial situation will be much better.>


Maybe one of our tax pros can comment on this situation. Isn't a persons future SS income stream based on reported salary? If one does not have anything reported despite working for many years they will not get very much in benefits later. I know that SS is going to be a mess in the future, but I feel confident that it will survive in at least a modified version. Isn't it short sighted to ignore this point?

Also, doesn't this raise a potential red flag leaving this type of business person open to a future audit? How much latitude does one have in offsetting business income with business expenses? It seems that once a business gets past it's start up phase there should be some real net income at least periodically. If not, I do not see how it could remain a going concern. If one has other income from investments to live on they can afford to work a break even or net loss business. Of course one could also ask why do that year after year? Obviously if one consistantly underreports income or overstates deductions they are commiting tax fraud. Do any of our tax preparers do returns for businesses that always manage to lose money?


BRG

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