> My understanding is "losses" is kinda vague if you own one of these "pass through" entities you can pay yourself a salary, have the "pass through" business lo

> My understanding is "losses" is kinda vague if you own one of these "pass through" entities you can pay yourself a salary, have the "pass through" business loose money then pass that loss off against your personal income. I'm not a accountant so I might be wrong. Say your pass-through entities has 100k in revenue. You could pay yourself 140k and mark down 40k of losses but that's financially disadvantageous because you're tax rate on the income will be higher than the tax rate on the losses. You're paying 13k in extra taxes to avoid paying 8k, donating an extra 5k to the IRS. Most companies try to shift revenue from income to profits because it will reduce your total tax burden.