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Originally Posted by marcsantoli
I just recently setup an S-Corp for my computer consulting business. I have been reading lots baout generating losses in the corporation to passthrough to my normal (w2) income. Problem is. How do I generate these losses without having that much income?
For example. If I have 5k of S-Corp revenue, how can I show that my losses are say 1k on expenses of 6k (500 a month in rent, payed to me for my home office). basic example i know.
I just can't seem to wrap my head around having expenses that are paid by me personally, like paper, driving, etc that would far exceed my revenue when you count rent on my home office.
Does a promisary note count as an expense for the current tax year? or only when the amount is paid.
ahhhh...
--marc
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And shit, don't pay yourself rent. That's a waste of effort, since you need to turn around and claim that as rental income anywyas - you come out exactly the same.
And promisary notes are not expenses. They're a balance sheet item with no P&L effect, except for the interest paid on them (since you're a cash basis taxpayer for 1040 purposes, and a more than 2% shareholder in the S corp).
Go spend the couple hundred bucks and talk to a CPA.