Spell Czech wrote:...and if your cash-basis corporate or partnership return would show a negative cash-in-bank-account because you needed some deductions and wrote checks for them [like on December 31st] that overdrew the bank account, don't show the negative cash balance on the line for cash, show it as a short term liability instead, on the tax return, and maybe even also in the GL. My understanding was that IRS auditors were trained - this would be fifty years ago, ok? - to pursue negative numbers shown in cash so they could deny the deductions claimed for those checks that were dated the last week of December... The negative cash balance was an audit flag.
When I become a judge, and this issue is before me, I'll opine that the instructions are an integral part of the forms.
.I don't see that rule for expenses in general, but isn't it generally applied that way? Is there an added requirement somewhere, that the cash has to be available when you deliver or mail the check?(b) Time of making contribution. Ordinarily, a contribution is made at the time delivery is effected. The unconditional delivery or mailing of a check which subsequently clears in due course will constitute an effective contribution on the date of delivery or mailing.
Why do you even want to engage with him on such a non-consequential, petty item that you come to the point of having a "heated debate" and risk relationship issues?
IRS does not care what name or title is placed on the chart of accounts for expense items (they do care about titles for balance sheet items ) .
They did not obtain approval from IRS to establish any specific expense account .
The 1120 S instructions provides a definition of each category and tells you generically what specific expense items to include in each category
" .So bottom line IRS will accept and have no problem with an expense category labeled "Annual Report Fee " or "Annual Report Fees
Jeff-Ohio wrote:My guy was all worried about some adequate disclosure rules he read about somewhere…
Jeff-Ohio wrote:on several tax forms, there’s a line item for “Other Deductions.” Can we just lump all (other) expenses in there, and present a single number (after properly completing all the other pre-labeled lines that ask for specific expenses, of course)?
Rev. Proc. 2016–13 wrote:"When the amount of an item is shown on a line that does not have a preprinted description identifying that item (such as on an unnamed line under an “Other Expense” category), the taxpayer must clearly identify the item by including the description on that line. For example, to disclose a bad debt for a sole proprietorship, the words “bad debt” must be written or typed on the line of Schedule C that shows the amount of the bad debt. Also, for Schedule M–3 (Form 1120), Part II, line 25, Other income (loss) items with differences, or Part III, line 37, Other expense/deduction items with differences, the entry must provide descriptive language; for example, “Cost of non-compete agreement deductible not capitalizable,” and the description must be provided on an attachment. Similarly, for other forms, if space limitations on a form do not allow for an adequate description, the description must be continued on an attachment."
makbo wrote:[ . . . ] For some reason, I cannot find the 2018 version Revenue Procedure 2018-11 published anywhere on the internet [ . . . ]
By labeling something, you are taking a position as to what type of expense it is.
HenryDavid wrote:Would capitalizing constitute a change in method type?
If you do that, you'd be capitaizing expenses
Would capitalizing constitute a change in method type?
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