I have questions. The ITR has a category named "losses". How is this accomplished using the transactions report? Does this refer to potential "cash on hand"? If I had a fixed price contract but the funds did not become transformed into cash, do I consider this as a loss?
I did try to search the web for answers. And these are the things that I found:
1. If the security or investment is sold for less than its original purchase price, then the dollar amount of difference is considered a capital loss. If the project is supposed to be won at $200.00 and I end up getting only the first milestone accomplished within the deadline set by the client and this milestone has made me earn $50.00 then I had a capital loss of $150.00.
2. Capital losses can be reported as deductions. So I need to declare $150.00 as one of the deductions.
3. Some losses are realized. Others are unrealized. The latter do not need to be reported in the tax return. How come I failed to realize the latter? Are there accountants on board?
Cussen, M. P. 27 June 2013. Capital Losses and Tax. Retrieved from https://www.investopedia.com/ (Date accessed 26 December 2018).