Comments on: Taxes for a company with a net loss http://smallbusiness.blogs.cnnmoney.cnn.com/2008/07/17/taxes-for-a-company-with-a-net-loss/ Editors from FSB magazine answer your pressing small-business questions. Tue, 15 Dec 2009 12:52:55 +0000 http://wordpress.com/ hourly 1 By: Srini Lokula, Newark, DE http://smallbusiness.blogs.cnnmoney.cnn.com/2008/07/17/taxes-for-a-company-with-a-net-loss/#comment-783 Srini Lokula, Newark, DE Wed, 23 Jul 2008 02:23:58 +0000 http://askfsb.wordpress.com/?p=390#comment-783 To answer your answer simply, If all cost of sales (COS) and Expenses are TRUE and LEGAL; and you have a NET loss then there would be no income tax. Please be noted that some of the expenses (Example: Meals and Entertainment) are NOT 100% deductible. Example: If you had gross profit of $100 and then had M&E of $150 then the net profit is negative $50. However, for tax (IRS) purpose the company made a profit of $25 You did not mention if your company is PROP, S-Corp, C-Corp ! The comments are from my experience !! To answer your answer simply, If all cost of sales (COS) and Expenses are TRUE and LEGAL; and you have a NET loss then there would be no income tax. Please be noted that some of the expenses (Example: Meals and Entertainment) are NOT 100% deductible.

Example: If you had gross profit of $100 and then had M&E of $150 then the net profit is negative $50. However, for tax (IRS) purpose the company made a profit of $25

You did not mention if your company is PROP, S-Corp, C-Corp !

The comments are from my experience !!

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