Introduction After figuring your business income and expenses, you are ready tofigure the net profit or net loss from your business. You do this bysubtracting business expenses from business income. If your expensesare less than your income, the difference is net profit and becomespart of your income on page 1 of Form 1040. If your expenses are morethan your income, the difference is a net loss. You usually can deductit from gross income on page 1 of Form 1040. But in some situationsyour loss is limited. This chapter briefly explains two of thosesituations. Other situations that may limit your loss are explained inthe instructions for line G and line 32 of Schedule C. Caution: If you have more than one business, you must figure your net profitor loss for each business on a separate Schedule C.