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1. silico+z11[view] [source] 2024-03-01 17:11:23
>>modele+(OP)
There is a lot in here but turning a non-profit into a for-profit definitely should be challenged. Otherwise why wouldn't everyone start as a non-profit, develop your IP, and then switch to 'for-profit' mode once you got something that works? You don't pay income taxes and your investors get write offs.
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2. ben_w+u41[view] [source] 2024-03-01 17:22:53
>>silico+z11
I'm not at all clear on what a "not for profit" status even does, tax wise. In any jurisdiction.

They are still able to actually make a profit (and quite often will, because careful balancing of perfect profit and loss is almost impossible and loss is bad), and I thought those profits were still taxed because otherwise that's too obvious as a tax dodge, it's just that profit isn't their main goal?

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3. emoden+061[view] [source] 2024-03-01 17:28:33
>>ben_w+u41
Well, you're confused because of your erroneous determination that they're "able to make a profit." They are not. They are able to have positive cash flow but the money can only be reinvested in the nonprofit rather than extracted as profit.
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4. ben_w+J61[view] [source] 2024-03-01 17:31:27
>>emoden+061
OK, so for me "positive cash" and "profit" are synonyms, with "[not] extracted" meaning "[no] dividends".
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5. im3w1l+p91[view] [source] 2024-03-01 17:45:16
>>ben_w+J61
It's all quite confusing. A non-profit can as you say turn a profit but isn't supposed to distribute it to owners.

There is a difference between positive cash flow and profit as profit has differences in accounting rules. If you invest in some asset (let's say a taxi car) today, all of that cash flow will happen today. But there will be no effect on the profit today, as your wealth is considered to have just changed form, from cash into an asset. For the purposes of profit/loss, the cost instead happens over the years as that asset depreciates. This is so that the depreciation of the asset can be compared to the income it is generating (wear and tear on car vs ride fare - gas).

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