Hello all. I am thinking of starting a business. This business will have zero profit and be 110% legal. In fact, the idea will seem stupid to you if you have half an inkling of common sense. But my question is not on whether it is a sound business plan. My question has to do with legalities and tax implications. Illustrative example of business: 1) Business purchases Widget X from itself at the retail price of $10. Total business expense = $10. 2) Business receives revenue from above mentioned transaction. Total revenue = $10. 3) Net income = revenue - expenses = $10 - $10 = $0. Question for the intelligentsia: 1) Is the above example "legal" in and of itself? Is it legal to have the customer and the seller be the same entity when operating as a business? Is it legal for some business vehicles but not for others (e.g. Sole propietorships, LLCs, s-corps, c-corps, etc.)? 2) From a tax perspective, would the above in and of itself result in zero taxable income? Thanks. PS I understand that the devil is always in the details, but assuming everything else was 100% legal and that no other information is provided, what are the answers to the questions listed? I also understand that a lawyer and tax professional are required before undertaking any business venture and this fact is not lost on me. Just testing the waters here.