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Posted by Harlan Lunsford on April 9, 2008, 7:52 pm
Please log in for more thread options Tyler Franks wrote:
>> Tyler Franks wrote:
>>> It is my memory from somewhere that an individual starting a sole
>>> proprietorship is suppose to wait until his first revenue to begin filing
>>> returns and writing off startup costs. But I cannot find adequate
>>> reference. I am already familiar with the option to write off up to
>>> $5000 and amortize the rest. My question deals with when to file the
>>> first Schedule C. Do we/ Should we need to wait for income to begin the
>>> process? Does the answer change if part of the cost outlaid is for
>>> depreciable property? (This is a bonafide business, not a hobby)
>>>
>>> Tyler
>> Forget about first revenue for a moment. On what date was your business
>> operational and open for business? What kind of business is it? retail?
>> wholesale?
>> service?
>>
>> What have you done so far to solicit customers/clients?
>>
> Well, understanding that every case is different, I had hoped for a generic
> answer. But I'll set out some parameters. Still I'm looking for specific
> references for accuracy.
>
> Oct 2007 Bought a shed to house inventory
> Nov 2007 bought plant seedlings (inventory)
> Dec 2007 advertised and created bank accounts...got licenses... paid
> utilities (water for plants) fertilizer Open for business but no sales.
Key here is "open for business", and since you had advertised, customers
were expected at any moment. Thus I would choose Dec 1, 2007 as opening
date of business. the shed will be depreciated starting in 2007 as will
other expenses which will create a loss for 2007.
>
> Jan 2008 sold $4000 worth of plants.
>
> Suppose was 2009 before sold plants?
But it wasn't, so there.
Congratulations though. The nursery business can be iffy and subject to
great variability. Example of course is down here in the South last
summer. as long as it still rains, I have a small creek by side of my
property, but come June, I'm not so sure i'll have water for my flowers
and tomatoes. Or my cotton plants which I plant each year as tradition.
ChEAr$$$,
Harlan Lunsford, EA n LA
in the land of cotton
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