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Old 03-15-2015, 04:41 PM
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if you fail at a business are you allowed to use the deficit as a tax write off?

Just wondering if I fixed and sold phones but ultimately ended up losing money is this a write off?



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Old 03-15-2015, 06:26 PM
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Originally Posted by Phonesxpres View Post
Just wondering if I fixed and sold phones but ultimately ended up losing money is this a write off?
A loss from the sale or other disposition of property held for personal use is not deductible, except in the case of casualty or theft. Gain on the sale of property used for personal purposes is always taxable. In addition this rule is applied on an asset-by-asset basis. Losses on the sale of personal use assets are considered personal living expenses Unless expressly allowed as a deduction, such as medical expenditures and home mortgage interest, personal living expenses are not deductible. If you change property to business use, your cost basis later for determining loss is the lesser of its value or adjusted basis at the time it was put to use as a business asset. For example, if you began to use the phone two years ago for business and its value was $100 at that time, that would be your cost basis for determining depreciation deductions and for loss (but not gain) on its sale. For purposes of determining gain, you can use the original cost, minus your depreciation deductions.



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Old 03-16-2015, 03:49 PM
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Thank you for the quick reply! I'm sure my answer lies somewhere where in what you wrote just having troubles understanding. But I should add...

I sold multiple phones. none of which I actually used. I purchased a number of phone parts as well, but in the end lost money and couldn't gain it back.(phones depreciated quicker than I sold them) This was purely a self-employed type business nothing legal about it. And the deficit only ended up being just a few hundred dollars. I must admit there was a lot of poor decision making on my part but it was a nice little hobby.

Just an example: Bought a phone for 200$ parts 10$ messed up repairing it. Cost extra 150$ which would of been ok but phone depreciated dramatically (new model/Carrier Deals) and sold the phone for 220$.

I'm factoring in all the business for the whole year and I end up with a deficit... Didn't make a dime. is this a write off?


Last edited by Phonesxpres : 03-16-2015 at 03:58 PM. Reason: add


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Old 03-16-2015, 04:03 PM
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Thank you for the quick reply! I'm sure my answer lies somewhere where in what you wrote just having troubles understanding. But I should add...

I sold multiple phones. none of which I actually used. I purchased a number of phone parts as well, but in the end lost money and couldn't gain it back.(phones depreciated quicker than I sold them) This was purely a self-employed type business nothing legal about it. And the deficit only ended up being just a few hundred dollars. I must admit there was a lot of poor decision making on my part but it was a nice little hobby.


Just an example: Bought a phone for 200$ parts 10$ messed up repairing it. Cost extra 150$ which would of been ok but phone depreciated dramatically (new model/Carrier Deals) and sold the phone for 220$.

I'm factoring in all the business for the whole year as well and I end up with a deficit... Didn't make a dime. is this a write off?



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