Offset investment sale with loss in diff business?

Question

I am launching a platform portal and need to invest in the development costs. If I were to seek a property and use the proceeds to fund the startup, do I still have to pay capital gains or can the "losses" from the startup cost be used to negate that?

Thanks for your help in advance

Eamonn McElroy · Answer

@Prashant Sheth

Maybe.  It depends on if the losses from the start up are passive or non-passive to you.

Tom Makinen · Answer

You have to create two entity and rent it out to your startup (a corporation) to get the deduction of both.  The rental income will be taxed as passive income on your 1040 if you do it via your LLC as SP or Partnership.  The expenses in your start up will be held until you can offset it in your income or up to 50K can offset your W2 if you fold that business.

Even if you buy your property in the corporation, you will end up holding that loss until you can offset it with income or when you close shop.

I suggest you talk to a tax financial advisor

Kelly DeWinter · Answer

You have to be more clear with your question. Buying a property does not guarantee a profit or proceeds, Selling a property may result in capital gains. I recommend you contact an accountant .