NECPA in NEBRASKA Posted March 31, 2019 Report Share Posted March 31, 2019 Taxpayer sold apartments on installment in 2016. In 2018, he paid out expenses for something that was red tagged and had to be fixed. I think that it is an investment expense and not deductible at this time, since they are not longer deductible on Sch A and he does not itemize anyway. If anyone disagrees with me, please let me know. He's sure that he can deduct it somewhere. Thanks! Quote Link to comment Share on other sites More sharing options...
Lee B Posted April 1, 2019 Report Share Posted April 1, 2019 In my opinion, these were legally contingent expenses at the time of closing , however the $ amount was unknown. In accrual accounting these expenses are estimated , for example, warranty expenses. In this case, if the installment sale is still on going, it would be an adjustment to the gross profit calculation. If the installment sale has been completed then the final year of the installment sale should be amended. 1 1 Quote Link to comment Share on other sites More sharing options...
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