Jack from Ohio Posted March 15, 2009 Report Share Posted March 15, 2009 I have a Master Auto Technician who purchased a large amount of tools for his Diesel Truck repair job. ($20K) All is financed through the tool dealers. Can I get opinions about whether to deduct (2106) the amount purchased, ($20K) or the amount paid in 2008 ($4,200). I await your experienced answers. Quote Link to comment Share on other sites More sharing options...
Janitor Bob Posted March 15, 2009 Report Share Posted March 15, 2009 I have a Master Auto Technician who purchased a large amount of tools for his Diesel Truck repair job. ($20K) All is financed through the tool dealers. Can I get opinions about whether to deduct (2106) the amount purchased, ($20K) or the amount paid in 2008 ($4,200). I await your experienced answers. Is he on a cash or accrual basis...i.e. does he recognize his income when earned or when actually receved? Quote Link to comment Share on other sites More sharing options...
OldJack Posted March 15, 2009 Report Share Posted March 15, 2009 It is the amount he "purchased and placed in use" for the year 2008. How he financed the purchase is irrelevant. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 15, 2009 Report Share Posted March 15, 2009 Jack is right. It's no different than if he bought a company car, you set up the car at purchase price plus sales tax, whether you paid cash for it or you financed 100%, or anywhere in between. Same thing with tools and equipment. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted March 15, 2009 Author Report Share Posted March 15, 2009 Is he on a cash or accrual basis...i.e. does he recognize his income when earned or when actually receved? He is a W-2 employee paid on "flat rate" time. Paycheck weekly. So he is on cash basis. OldJack stated what I had thought. I was just asking to make sure I was on the right track. Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted March 15, 2009 Report Share Posted March 15, 2009 Stick with OldJack and KC on this one. I have been and still am a ASE Certified Master Technician and they both have hit it right on the head. Terry D. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.