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Originally Posted by noclue
If you are only making a tiny sum but deducting more in expenses thus constantly losing money you will get audited. I forgot CRA's criteria but they can just find your expenses invalid and slap you with fines. Worst case scenario is tax fraud lol
Home-based businesses are a big flag.
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Home-based business would be hard to argue. But in the case I shared, the "rental company" is part of many of his ventures, so IRS has never audited him even it doesn't earn money. Many businesses, especially large corporations use similar strategies all the time to limit their liability on assets/investments all the time. If you are doing it right, it shouldn't raise any flag.