How long are you allowed to show a loss for a small business? Started as independent consultant in Aug 2012 & had losses in 2012, 2013 & now 2014. Is this allowed?

I have a small business on the side (Independent Consultant) which I started in August 2012. I reported my startup costs, commission, business expenses, cost of goods sold, etc as a loss on my 2012 and 2013 income tax. For this year 2014 I also generated a loss with all the business expenses. Am I allowed to still report a loss this year?

How long before you need to show a profit for your small business? Do they count your profit/loss as your commission only or commission minus business expenses?

Also where would I claim the cost of my booth at a trade show? I do trade shows to advertise my products and obtain new leads for clients so is this an advertising expense or something else?

Thank you in advance for your help!


1)  Your booth can be claimed as an advertising expense, as that is what you are doing at a trade show. Or you could claim under Other with a description: Trade Show booth rental; either would work.
2)  Profit or Loss is always the direct result of REVENUE (not including GST) minus allowable EXPENSES.
3)  Regarding losses... FIRST OF ALL do you have any other income from employment, etc?  Your business loss would first be applied against total income on your current year tax return, which lowers your taxable income.  If one carries on a business year after year and consistently shows losses, it could possibly raise a flag with CRA.  The thoughts of many could be "why would a person continue in a business that is not making any profit year after year?"
Sorry I am not positive with regards to how long you can carry forward a "proprietorship" loss. Hopefully someone else can answer this question??
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