I know a guy that got $10 to 15 million from the sale of his family business and then in the DOT.com boom lost most of it. Can he uses his horendous losses to his advantage? Can this guy deduct his past losses to future income, and if so for how long?
If A guy looses a fortune ($10 to $15 million) .............Can he deduct his losses?
- Thread starter Doctor Zoidburg
- Start date
The dotcom thing was awhile ago, why ask now and why here?
Thats what CA's and lawyers are for, you know the kind that give an opinion for a fee. With that amount of money at stake I can understand why your "friend" lost it if you are asking here.
Thats what CA's and lawyers are for, you know the kind that give an opinion for a fee. With that amount of money at stake I can understand why your "friend" lost it if you are asking here.
He should get a good accountant.Doctor Zoidburg said:
In general capital losses (negative capiltal gains) can be used backwards 3 years and forward 7? years to reduce capital gains.
But there are sneaky ways to characterize the loss as a "business loss" in which case it becomes an income deduction and can be used to reduce income 3 years back and 7? years forward.
He is not a friend, he is just a guy that I know and recently bumped into. As a matter if fact, he was a prick. He is now struggling to get back on his feet, with what I estimate to be about less that 10% of his original wealth. Why I ask here is that it is just a good place as any other to ask this question, as I have no stake in his wealth or lack of wealth. To tell you the truth I would not help him in any way unless it benefits me in some way. He was a person that looked down on a lot of people when he was wealthy.
Lancs,
I hope your dad retores your inheritance soon, so you will no longer have to sit in front of you old computer with the Windows 98 opereating system, posting on TERB day in and day out!
Lancs,
I hope your dad retores your inheritance soon, so you will no longer have to sit in front of you old computer with the Windows 98 opereating system, posting on TERB day in and day out!
danmand said:
Curses, foiled again.
Dr. Z.
I'm just amazed that some people can blow through money so easily without any back up plans. he must have had some advice in the past ( ie you said he sold a business) so where were those people??
Sadly my father is not in a position to vary the amount of any inheritance I may get.
.
He had about $10 to $15 million before the Dot.com boom and he was living the good life. When the Dot.com boom came along he started to invest more and more of his money. At one point he was bragging that he was worth more than $800 million. ( on paper only ) At that time many people thought it was going to go on forever.
As far as his advisors were concerned, the people that gave him advice to sell his share of the family business also had a stake in the future of the company, as they would continue to advise the other family members in the future business.
As far as his advisors were concerned, the people that gave him advice to sell his share of the family business also had a stake in the future of the company, as they would continue to advise the other family members in the future business.
That is entirely possible. One of my good friends took $1M from the sale of his company and invested it early in the internet and fiber optics companies. He was ahead more than 2 million, but when it burst, he continued to "double down" and pretty much lost everything.marc said:
Not as far fetched as u may think. I know of a similar storry, almost exact numbers but the ~800 million was "on paper" for only a few weeks then declined rapidly. Too bad he didn't sell but some people just can't pull the trigger.marc said:
He had approx 10 to 15 million ) in my estimation ( could have been a little more ) from the sale of his part of the family business. He invested and made a lot of money on paper. ( Just because you are worth $800 million on paper, it does not mean it is your money till you sell your stock) He is now worth less than 10% of his original fortune. ( 1 million to $500k ) He is now trying to drive up his worth by investing in small crappy businesses.
BTW, he drives a Hyundai ( the expensive one, $30k ) because one of his golf buddies owns a dealership.
BTW, he drives a Hyundai ( the expensive one, $30k ) because one of his golf buddies owns a dealership.
His loss on his investments in shares of other companies are capital losses and can be carried back 3 years and forward indefinitely. These losses only offset any capital gains reported or earned in the future.
His business may be a bit different. If its a small business corporation and he hasn't used up a portion or all of his lifetime capital gains exemption, the loss on the shares (or assets) may be considered an allowable business investment loss and may offset all other sources of taxable income. These losses are a form of non-capital losses and they can be carried back 3 years or carried forward 10 years.
I suggest your buddy seek out a tax accountant.
His business may be a bit different. If its a small business corporation and he hasn't used up a portion or all of his lifetime capital gains exemption, the loss on the shares (or assets) may be considered an allowable business investment loss and may offset all other sources of taxable income. These losses are a form of non-capital losses and they can be carried back 3 years or carried forward 10 years.
I suggest your buddy seek out a tax accountant.
Did he earn the original $10M in the family business, or did his Dad earn it, and he just got given it? One thing I can not stand is people who get lots of money from Dad, risk it and initially win, and think that this makes them businessmen. It doesn't take any skill to gamble with money your Dad gave you, and even an idiot wins more than 50% of the time in the stock market.
C Dick,C Dick said:
I suspect many of the self-made fathers are too busy running their businesses to sit down to teach their children the skills to operate a successful business. Secondly, the self-made fathers could have gotten lucky in a business venture and really couldn't explain the reason for their successful business.
C Dick, any of your children able to manage your company if something happens to you tommorrow? If so, you are way a head of your game with all the exit strategies ready to be executed.
