If a business is operated as a passthrough entity, the startup losses of the business may be deducted against the current taxable income of the owner.

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Passthrough entities, such as partnerships, sole proprietorships, and S corporations, allow the business income and losses to pass through to the owner's personal tax return. This means that the owner can deduct their share of the startup losses against their personal taxable income.

If a Business Is Operated as a Passthrough Entity, the Startup