Quote:
Originally Posted by slapass
You get to write off expenses so that companies that don't make money right away are allowed to continue. If you had to feed a company that was grossing 100k a year and groing but wasn't making money yet, you would increase the barrier to entry for normal people.
You pay tax on the difference and not the gross like in Russia.
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Many years ago when I was right out of high school I worked for Radio Shack. The manager I had when I first started then had 3 or 4 different DBA's for different businesses. He had a degree in accounting and had things set up so basically one business owned his house, one owned his furniture, one owned the car and so on. He had all his assets split up among them and each business rented items to the other business and wrote everything off until he got it down to where he had zero taxable income every year.
Not long after I started working there he got fired so I don't know if he ever got caught, but at that time he told me he had been doing this for 10 years.