Business Return and Gifting of Services

[Bert73]

I have a sole proprietor that gave out her services at no cost and wants to deduct this, it was over $400. Am I missing something or is this limited to the $25 per person gifting rule? I am sure this is limited, but I am grasping at straws to lower her liability. I would love a little feedback.

[ChEAr$]

I have a sole proprietor that gave out her services at no cost and wants to deduct this, it was over $400. Am I missing something or is this limited to the $25 per person gifting rule? I am sure this is limited, but I am grasping at straws to lower her liability. I would love a little feedback.

"gave out her services"?????

There's no deduction to be taken, nowhere, nohow, novalue. Proprietors always work for
free.

[Bert73]

"gave out her services"?????

There's no deduction to be taken, nowhere, nohow, novalue. Proprietors always work for
free.

hahaha, okay let me reword that. My sole proprietor shot some photos for free to promote her business and wants to deduct the whole amount. Is that better?

[AJsTax]

The cost

of materials and equipment is already expensed with the rest of the business and is the only allowable deduction. Nothing for value of time. Unless there is an employee involved and then that cost is already expensed also.

[JohnH]

hahaha, okay let me reword that. My sole proprietor shot some photos for free to promote her business and wants to deduct the whole amount. Is that better?

Your client already deducted the value of her time, because it was never included in Gross Receipts to begin with.

As AJ & Harlan have pointed out, her out-of-pocket costs for film, camera depreciation, etc are already folded into the supplies or COGS expense.

Nothing else matters, except that you have to figure out how to make the CLIENT understand.

[Bert73]

Thanks

Thanks everyone, I think I was overthinking this one.