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Allowable business losses
originally posted: 11/22/2006
reposted: 3/18/2011
Q:
My home-based business had a big loss last year and I expect another loss this year. How can I be sure the IRS will allow me to deduct these losses against other income?
A:
Assuming your business is not incorporated, the only way to be sure is if you had income for the three years prior to last year, then the losses are definitely allowed. Otherwise there is always some room for interpretation according to
published
IRS guidelines.
Losses of a home-bases business are subject to challenge by the IRS
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