My father invested $15K in my business in 2001. Business died year later. Can he see tax return on monies?

Answer 1

Your father could have taken the loss as a deduction but only in the year your company went broke, it's too late now to take that deduction.

Answer 2

If this was a true investment then he can claim the loss on his taxes as a capital loss. It must be an arms-length transaction since you are closely related. The IRS often looks at these as gifts if you didn't structure things properly.

No refunds are available for tax years 2002 and 2003, however the loss limitation is $3,000 per year so he could file amended returns for 2002 and 2003 to carry forward the remaining losses. He can still get a refund for tax years 2004 though 2006 so it might be worth the hassle of amending those earlier returns in order to carry the losses forward to the years where the refunds are still available.

Answer 3

Not sure what your question is.

If you're asking if he can look at your tax return, no he can't unless you show it to him.

If you're asking if he can claim a capital loss on HIS tax return, he might have been able to if it was clearly an investment and not a gift to you, but if the business died in 2002, he'd have had to claim it for that year (when the investment/stock became worthless) and it's too late to claim refunds for 2002.

Answer 4

Even if it was deductible. The statute of limitations for claiming refunds for tax years ending in 2003 or before has expired. He would have had to claim a capital loss in 2002.

Had this happened more recently, I believe he could use the loss to offset capital gains and use up to $3,000 net loss per year.

Answer 5

Since this was not an arm's length transaction, tread with caution. If you were self employed, it's too late. If your business was, for example, a partnership and his interest was not dissolved/sold until within the last 3 years, & he was a silent partner (no active participation), you may want to read the following:

See the very bottom of page 9 & top of page 10 at the following:
http://www.irs.gov/pub/irs-pdf/p925.pdf

Answer 6

I believe you are asking if he can write off the $15,000 loss on his taxes and I believe the time allowed for him to do that has expired. I believe you have 3 years to claim a loss on your taxes. in whcih case 2005 would have been the last year to claim it.

Answer 7

He can write it off as a bad business loan and use it in next years tax return to get a portion of what he paid in taxes while the business was in operation. I guess it really would depend on how much tax he submitted as to how much he would actually get back. And I guess it would depend on what country your dealing with because US has different laws than Canada.

Answer 8

What are you asking? tax return? please clarify.