I’ve heard stories like this, many times, from businesses people.
They certainly believe in the pattern.
I don't want to go too far down the rabbit hole of hn speculation, but if another entity owes you 100k, and they go bankrupt, there absolutely are tax implications.
That is a lack of payment situation.
Revenue was still earned (and charged) … and since you never collected revenue then you don’t pay taxes.
The second one (the prescription one) may well be wrong. It’s total speculation, on my part.
The first one, though, I’m pretty sure is right.
I love the traditional debate tactic, where we find one part of an argument to be wrong, and use that, to say the other part is, too.
It’s no matter. I’m done here, anyway, and yield to you. The fox ain’t worth the chase.
Businesses are only taxed on actual revenue earned.
What you decide to charge—whether $100, $50, or even giving it away for free—is purely a business decision, not a tax one.
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This is different from a nonprofit donation scenario though. For example, if your service normally costs $X but you choose to provide it for free (or at a discount) as a donation to a non-profit, you can typically write off the difference.