Finance & Funding

Why do people choose to purchase businesses that don't produce a profit? Are there tax incentives?

No one chooses to run a business that doesn't earn money deliberately. If a business doesn't produce a profit, those losses can be used to offset income earned in that year, or in later years something known as a loss carry forward. So, no there are no tax incentives for losing money. But if a loss is inevitable, it can be used as a deduction. Best to consult with your accountant to get a review of your business and personal financial positions.

Alek Mlynek
Technical Consultant

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