4 ms·

Investment is considered as asset gain in some accounting systems, leading to taxes. I am not an accountant, though.

• vetinari 11y ago
  Investment is basically transforming one asset (cash) into another (tangible or intangible property). It doesn't say anything about profit and loss - and it's profit, that's taxed. Now, in order to have some cash at all, you probably need some income - and that income, minus your costs is the profit, which will be taxed. So you want to turn your cash out for investment into cost, so you could minimize your earnings before taxes. The catch is, that the investment is going to serve for years, so you can't deduce it all at once - you have to depreciate it (put a fraction of it's price into current years costs). [Of course, another reason is, that your country wants as much as taxes as possible right now, so for it more taxes paid now are better than zero taxes now and higher taxes next year.] -- This is not an accounting advice, it is very simplified. Limitations apply. Consult a professional if you need it. There might be error due to printing or mistranslation. You know the drill.
• jussij 11y ago
  That is capital gain, but I doubt you will get much in the way of capital gain if the institute you invested in is not making a profit. In fact the opposite is quite common. Companies do an initial IPO to raise capital and then spend the next few years doing nothing but Cash Burn as they burn up all the capital raised during the IPO. Eventually, if they fail to deliver a profit they run out of capital to burn and they go under.