Did anybody see the article in the WSJ today titled “Entrepreneurs win tax case versus IRS”?
This could be huge for managed service providers, many of whom are structured as LLCs.
Essentially the case says that an entrepreneur can now use losses in one LLC or LLP to offset their income from another LLC or LLP.
That’s a big benefit to the small entrepreneur that has multiple irons in the fire.
Let’s say you have two businesses going. In one, you have losses of $175k. In the other, you received an income of $200k. Under the tax rules that have governed up until now, you would be taxed at $200k in income for the year, not receiving any tax benefit from the losses you incurred.
According to the new rules, you would only be taxed at $25k, because the $175k in losses can be used to offset your income!
Talk to your accountant and see what you can do to take advantage of this. Then share what you’ve learned with your clients that are business owners – they’ll love the insight.
MRC
