Need to boost my reported income

[kb-ly]

I am an artist, a self-employed sole proprietor. I was unable to work last year because of illness and don't want to file a business loss. Can I boost my income by reporting a loan as income?

[PattiF]

No, loans are not considered income. Income is money that you earn from a job, investments, or self-employment. 

You should file the tax return with the business loss for the year.

[kb-ly]

What other income options are possible in my situation? A gift? A loan that has been forgiven? An investment from an outside source?

[kb-ly]

All of these were real contributions made to help me during my illness. Can I claim any of them as income?

[DianeW777]

It depends.   Here is an explanation for the types of money you describe.

1. Gift: No, this is not income in any scenario for the recipient.  The donor would file a gift tax return if the gift was $16,000 or more for 2022.
2. Investment from an outside source: This seems like a gift  for a sole proprietor.  If it was a different entity such as an S Corp or a partnership then it could be considered capital but again is not income.
3. Loan Forgiveness:  If you had a true loan with documentation, and a note of forgiveness from the lender again this might be a gift, or it could be debt cancellation income but it would not be business income.
   • Topic 431: Cancelled Debt-Taxable or Not