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Comment by jt2190 | Hacker News Reader

Can you elaborate? As a business owner in the U.S. I can opt to reinvest all revenue back into the business, thus would show zero net profit but (presumably) increase my company’s value. (And remember there are other taxes and fees paid to various governments, not just tax on income/profit, so it’s not typically like nothing gets paid.)

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>As a business owner in the U.S. I can opt to reinvest all revenue back into the business,

Not entirely, no. Any of those reinvestments that count as capital expenditures aren't immediately deductible, but only on a throttled schedule, which is why the concept of depreciation exists in tax law:

https://news.ycombinator.com/item?id=15061439

I think I said that?

> … it’s not typically like no taxes get paid.

This is why I asked for elaboration: The poster was unclear about how, say, making capital improvements (and getting taxed on those over time) would somehow look suspicious to the IRS, as it seems like this is an extremely common practice. I assume it’s not that then, but something else which I’d love for the poster to share.

Your comment made it sound like any re-investment back into the business would count as a cost that then cancels the profits that would be taxed. Even with your clarification, it still sounds like that. This is orthogonal to taxes that would be levied on things other than profit.

You can't reclassify profit as reinvestment to show zero net profit. (If you could every business would have an internal hedge fund or private equity business and would show zero net profit).

https://www.irs.gov/newsroom/know-the-difference-between-a-h...

As a business owner, if you provide labor to the business, you have to pay yourself a salary.

This is why many people make minimun wage - they get a salary but they use the business profits to live on. See your accountant for all the fine print before doing this.

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