It’s pretty simple. I’m surprised more people don’t know about this.
it’s called net operating loss. when you’ve lost money over the last ten years you can deduct those losses from your gains and only pay taxes on the difference.
Makes senses, right? A business needs to cover the losses before there is really a “profit” to pay taxes on. But this ends up incentivizing losing money, and makes the silicon valley business model of raising a ton of money and running at a loss to try and dominate the market a lot more profitable
it’s called net operating loss. when you’ve lost money over the last ten years you can deduct those losses from your gains and only pay taxes on the difference.
Makes senses, right? A business needs to cover the losses before there is really a “profit” to pay taxes on. But this ends up incentivizing losing money, and makes the silicon valley business model of raising a ton of money and running at a loss to try and dominate the market a lot more profitable