Bad Investments Don’t Produce NOLs

Pass-through businesses that lose money may produce in net operating losses (NOLs) for owners. Investors who lose money usually are limited to capital losses. That’s what a retired engineer and wealthy investor found out when $4.5 million of his money was lost in financing films through limited liability companies. A U.S. District Court in a case for a refund said the losses were not ordinary losses (NOLs) because he was not in the businesses; he merely invested in them.  #IdeaoftheDay

Check out the new blog post today!