Mexus Gold US (MXSG)

[A Dinosaur]

I'm not an accountant, but I used to do my own taxes.

Debt and equity are different animals. If you borrow money to cover your losses/expenses, that is a debt. If you sell stock to cover them, that is equity (ownership) in the company. If you sell a product or service, for more then you paid for it or not, that is income.

So much for sources of revenue. Money received for selling stock is not income.

Only the third source may be taxable. The US tax code (and I believe the Mexican one also) allows you to deduct both costs and losses, including carry-overs, from your income before computing the taxes due. Debt itself doesn't enter the equation, but the interest paid on that debt usually does. The interest, whether paid in cash, in kind services/product or stock is an expense and deducted from your current income.

At that point, your equation becomes true. So, if Mexus has accumulated losses (expenses, depreciation of equipment, and depletion of resources) of about $30 million, it can offset current profits by that amount in calculating its taxes.

I think you are confusing your schedule "D" if you file a US form 1040. You are limited to deducting $3000 per year of excess capital losses. N.B. "Capital losses", not operating losses. Schedule "D" both for businesses and individuals only applies to capital gains and losses, not operating losses.

Hope this helps.

Dino