With Secfi Financing, any gain or loss when you settle your contract with us is considered a “capital gain” or “capital loss” on your taxes.
With Secfi Financing, any gain or loss when you settle your contract with us is considered a “capital gain” or “capital loss” on your taxes.
Take this simple example:
In the year that you settle your contract with Secfi (some time after your company’s exit), you’ll either realize a capital loss or a capital gain in relation to the settlement of the contract. For example, if you receive $100 in financing from Secfi, and you pay back $80, you would have a $20 capital gain. On the flip side, if we gave you $100 and you paid back $130, you'd have a $30 capital loss.
In the event you have a capital loss from your Secfi contract, the cash advance rate and equity share fee amounts from the contract could be applied as a capital loss on your tax return – depending on the amount you pay back to Secfi. Just like any other capital loss, you can net this against your capital gains.
Note, you can claim a capital loss of up to $3,000 against your ordinary income per year and carry forward any remaining capital loss to the following year(s).
If you have a capital gain from your Secfi Financing contract, you will need to report that when filing your taxes as well.
As always, we are providing the above as general information, but it is not investment or tax advice. For your specific situation, you should discuss these details with your investment, tax, and legal advisors.