cientax Posted September 25, 2008 Report Share Posted September 25, 2008 Same client as in earlier post, (house flipper; buys, improves, builds and sells). He has a line of credit with the bank that he uses for purchasing materials for the houses. Is this considered investment interest and deducted using Form 4952 then to Sch-A or is it Sch-C deduction or is it to be included in COGS with materials? We have NOL and not sure if it is to be included on line 6 of the NOL worksheet "Nonbusiness Deductions". Please advise on where to include this, For now we have it on Form 4952 and Sch-A as itemized deduction which will then be disallowed for the NOL. We really don't want a larger NOL. He is very productive in his business but with the economic slump and not many buyers, he has a loss for 2007. His inventory is actually what gives him a loss otherwise he would have a good gain. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted September 26, 2008 Report Share Posted September 26, 2008 Interest on this sort of loan is normal business expense, so I'd put it on the C on Line 16. Quote Link to comment Share on other sites More sharing options...
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