Technical topics regarding tax preparation.
12-May-2022 10:18am
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I have a client who has about 2million in AP due to companies that went out of business in 2020 because of pandemic.
Client has not heard from any of the companies and unsure if I should leave it in in AP or reverse it and pick it up in income.
Client is confident that he will not have to pay the AP
12-May-2022 10:20am
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Did they go out of business because some of their customers didn't pay bills they were due?
Seems like there is more to the story here.
~Captcook
12-May-2022 10:29am
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12-May-2022 3:53pm
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CaptCook wrote:Did they go out of business because some of their customers didn't pay bills they were due?
Seems like there is more to the story here.
LOL! I was thinking the same thing. The companies didn't send your client to collections?
15-May-2022 10:23am
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escheat - did not think about it. Do not believe client will volunteer
no collection no contact of any kind - phone disconnected - emails not answered.
unsure what to do with AP on books
15-May-2022 11:58am
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Are you sure you are getting the full story here?
Hard to believe a company that is owed a significant sum simply shut down with no efforts to collect. Did they enter bankruptcy? If so, the AR on their end would be an asset to be collected as part of that process.
Wondering if you don't have a legal question.
16-May-2022 10:42am
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I agree hard to believe but thats all I know.
I will keep the AP on the books and see what happens. Just concerned in case of an audit having 2 year old AP not paid-
16-May-2022 2:59pm
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Don't be concerned about it for tax purposes. The debts are still owed.
Steve
19-May-2022 12:55pm
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20-May-2022 7:08pm
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What type of business is your client in? Not all “ap” is equal…
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