Change inventory accounting - purchasing from related entity

Technical topics regarding tax preparation.
#1
Wiles  
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I have a question about whether we can change this inventory accounting method, i.e. is this new method even allowed.

Taxpayer operates as a partnership and is in the winery business. Managing partner owns 83% of the partnership.

The managing partner also operates a vineyard on property he owns and report this income as a sole proprietorship.

Each year, the taxpayer purchases virtually all of the grape from the managing partner's vineyard operation to be used in its wine production. The current accounting method for the taxpayer is to capitalize the grape purchases into inventory until the wine is ultimately bottled and sold.

The taxpayer wants to change its method so as to deduct the grape purchases in the year of purchase.

I know that if this was all one operation, the taxpayer could use the cash method and avoid capitalizing any of its vineyard production costs. Since the managing partner owns 100% of the vineyard and 83% of the winery, can they adopt this same method?
 

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