net operating loss

Your Business Loses Money; Tax Benefits or Concerns?

I’m often asked by nervous new business owners if they can recover a tax refund for a business loss. Receiving a tax benefit from a business loss depends on the type of entity formed and whether the investment in the business is “at risk” in whole or in part. It also depends on the presence of other income.

Owners of a corporation are not taxed directly on business profits and losses because the corporation’s taxes are taxed separately. For other types of enterprises, business income and loss passes through to the owner’s personal tax return. These business types are:

Marvel Entertainment And Cancellation Of Indebtedness Income


Under the tax code, when cancellation of indebtedness income excluded from gross income results in a reduction of combined net operating losses, and a business entity can carry forward this reduction to offset income in following tax years, must this net operating loss be reduced at the combined entity level or at the individual entity level?

Related Tax Rules And RegulationsMarvel Entertainment And Cancellation Of Indebtedness Income

Internal Revenue Code Section 108