Investment in a new company is it tax deductible

Forum|Forum|2 years ago
September 28, 2023
5 replies
69 views

My spouse started a new business in 2022 and i provided her seed money, can I deduct the seed money as an expense?

Thanks

NCperson

Level 15

@Raj1 sounds like you loaned her the money or are an equity owner. That is not an expense, so not deductible.

Raj1Author

Level 3

Thanks

Mike9241

Level 15

it would be a gift, if there's no requirement to pay you back. an intra family loan over $10,000 could fall under IRC code section 7872. this could pose problems under its imputed interest rules. The amount you gave her is not deductible by you regardless of loan or gift. She may be entitled to a deduction depending on what the money is spent on. there are various rules concerning deductibility and since this is her first business consulting with a tax pro to go over the dos and don'ts is advisable also, income tax and other reporting obligations, possibly sales tax.

Mike9241

Critter-3

Level 15

What is deductible is the expenses this money paid for on her business return ... like if this bought inventory or paid rent/utilities on a business location.