wartz
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Why don't you ask for stock in the company that way if the company fails you will have an investment write-off? |
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jack bauer
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Loan the money, in writing, with some interest and a specified period of time to be repaid.
If not repaid this becomes a business bad debt, deductible in the year the debt becomes worthless. |
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xtraheavy01
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No . Only if he is section 501(c)3 which is a charitable organization.
If you loan him the money and he does not pay you back, you maybe able to write it off as a short term capital loss. |
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Cat
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Your friend's business is not a charity. So it is not deductible.
If you want to deduct money given away, only give registered charitable organizations.
What you did was give a gift. Hopefully, what you did was "invest" - but unless there was an agreement between you about that, or having him pay you back eventually. Otherwise, it's just a gift. Like giving a birthday present (birthday presents are not tax deductible) |
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growing inside
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No. If you make him a loan and he can't pay you back because the business fails, then the loan amount can be written off. But gifts can't. |
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Judy1
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No, that's an investment or a gift, not a charitable donation. |
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bcnu
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It's not a "gift" to the corporation, it's a "contribution to capital" for which you should receive stock (partial ownership) of the corporation. If the corporation later succeeds and you trade your shares, you will have a capital gain or loss for tax purposes. You may also receive dividends on your shares if the corporation is successful and you hold them. You can also request preferred shares that have various provisions for you to acquire MORE of the investment if the company becomes wildly successful.
You might also invest as a limited partner in a limited partnership or as a member in a limited liability company (LLC), and obtain certain promises in return for your investment.
It could also be framed as a debt, rather than equity, and you would need to document the terms for repayment, after which you would have tax consequences for interest or for non-payment (income and loss).
But it should not generally be discussed as a deductible "gift" unless it is a charitable organization with an exemption under 501C3 or 501C4, and only to the extent it is not given in exchange for something of value and does not exceed the deductible limits according to your adjusted gross income. |
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Jss
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No, it is gift.
If you give gift of more than $12,000 to any one person, you must file gift tax return.
Read more about gift tax http://taxipay.blogspot.com/2008/03/us-gift-tax.html |
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gail w
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no not on your personal tax form |
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chatsplas
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NOPE, not unless it's a 501c3.
You should buy stock in his corporation, and then later you will have a capital gain or loss when you sell the stock. It's basically a donation, in the case of most small businesses, but there is no tax deduction for it. |
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travelguruette
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No it cannot. Donations are only deductible if given to registered charities. |
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src50
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No. That is a gift and is not deductible. |
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BobApril
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I'm pretty sure only donations to tax-exempt organizations can be written off. What you are talking about is giving a gift, not a donation. |
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Sharon T
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Absolutely not. It would be a gift because she isn't a recognized charity. |
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