Quote:
Originally posted by Oldone
Recording is a tax write off business. That's where the ultimate payment lies. So pull out those calculators and pens. That is where the high life resides. |
I've never understood the tax write off argument. You don't need to be an accountant to see the implausibilty of it.
For example say your marginal corporate tax rate is 25%. Then on each dollar you lose your tax benefit is 25¢ on the dollar.
A metaphysical impossiblitity to make money this way.
The only possible way tax loss can ever be a net gain is if you buy a business with unrealised tax loss for less than the total value of the loss and your current business is profitable .
E.g. the aggregated tax loss is $100,000 and you buy the business for $75,000 and gain $25,000 from the tax loss you apply against your overall profitable business (for simplicity, ignoring any salvaged capital assets from the business). Profitable being the keyword here. I'm not even sure accounting rules allow this any more.
But you would never start an intentionally money losing business for the tax write-off. That's absurd. For each dollar you lose, you only get 25¢ back in tax benefit.