amortize loss on pre-incorporation expenses?

Mike or Penny Novack stepbystepfarm at dialup4less.com
Tue Aug 22 08:06:38 EDT 2017


On 8/21/2017 8:18 PM, Mark Hedges wrote:
> Hi, so, thanks for an amazing accounting program.  I'm still learning
> how to use it.
>
> ........
> I will have very little personal or business income this year, so
> claiming this as a loss on taxes this year will not be helpful.
>
> The accountant said I can amortize the loss until future years and
> claim it as an expense on a future year's tax return.
>
> How do I account this in GnuCash?
>
> Thanks.
> Mark
I will give the same answer to this as I give to similar questions. Your 
real problem is NOT about how to account for this using gnucash but in 
not knowing how to account for this in ANY method of doing double entry 
bookkeeping. In other words, if you knew what transactions you would be 
entering were you keeping your books the old fashioned way, pen and ink 
on paper, you would probably see how to enter those transactions using 
gnucash.  Gnucash partially automates the process, keep the books in 
balance (avoids transcription errors),and produces report, but it can't 
tell you what transactions you should be entering.

Either have your accountant show/tell you, or get a text "accounting for 
the S corporation" and look up amortized losses. I'm not doing 
accounting for any for profit corporations and so would have to look it 
up myself. And even if I knew off the top of my hat, am not qualified to 
give that sort of advice. Knowledge of tax law with regard to S 
corporations is necessary to know how, and to what extent, you can defer 
passing through gains and losses << S corporations are taxed more like 
partnerships are taxed than how regular corporations are taxed >>

Michael D Novack



Michael D Novack


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