Sch C - Short tax year

[oceanlovin'ea]

If a person purchased a business in Oct and was a sole proprietor, would you have to figure depreciation as a short tax year? Everything I read says partnerships, corporations and estates must use short tax year. No mention of sole proprietors.

Thanks. Linda

[Bill Tubbs]

sole proprietorship purchased a business

No, you do not have a "Short Tax Year" with a sole proprietorship. When you say the person purchased a business... I figure you're saying that she bought the assets of the business. If so and if that person did not have any other on-going business before the purchase in October, then the purchase of all these assets in October will cause taxpayer to use MQ convention for the purchases. So, only 1.5 months depreciation will be deductible in 2005, plus any amounts of Sec 179.

Bill

[oceanlovin'ea]

Thanks

Bill. That is what I thought and what I did. But then I started second guessing myself.

Thanks.

Linda F

[Brian EA]

If a person purchased a business in Oct and was a sole proprietor, would you have to figure depreciation as a short tax year? Everything I read says partnerships, corporations and estates must use short tax year. No mention of sole proprietors.

Thanks. Linda

Hey Linda

Here is where the software comes in. All I have to do is enter the assets with the date put in service and it does it all, unless you are doing a manual return.
You can then go back and check it manually.It works like a charm

[oceanlovin'ea]

I did that

when I did the return but I had a partnership that started in the middle of the year this year also and had to do a short tax year calculation for their depreciation. So I just was checking to make sure my Schedule C for this person was right.

Thanks

Linda F

[Bill Tubbs]

Which software

Here is where the software comes in. All I have to do is enter the assets with the date put in service and it does it all, unless you are doing a manual return.
You can then go back and check it manually.It works like a charm

Brian,

Sounds like the software you're using automatically determines that MQ has to be used instead of HY??? Which software do you use? ATX does not do this for me.

Bill

[JoshinNC]

wouldn't the software figure that too?

I just put in the date the partnership, corp, etc. began and the in service date for the asset and roll with it. Isn't that why I pay for the software, so I don't have to figure things like that out?

Maybe I'm wrong, but I thought the software would take care of all that!

[JoshinNC]

Drake is what I use.

Never had an issue, at least that I know of. But, read my above post.

[Brian EA]

Brian,

Sounds like the software you're using automatically determines that MQ has to be used instead of HY??? Which software do you use? ATX does not do this for me.

Bill

Hey Bill

Drake is what I use and it does it all.

[Bill Tubbs]

Thanks.

Drake is what I use and it does it all.

Thanks Brian (and JoshinNC).

Last time I looked at Drake though, I think it was out of my budget

Bill

[Brian EA]

Thanks Brian (and JoshinNC).

Last time I looked at Drake though, I think it was out of my budget

Bill

Hey Bill,

I do not know how many returns you do; however they different plans. For first timers you can use the Pay Per Return plan. You buy the first 50 returns for $500 and then each additional return cost $10. On your second year you buy the entire package for $995. It is unlimited and includes 1040, All state returns, 1120 1065 990 1041 etc. There is no additional charge for EF. The software must be purchased before may 31 to get the 995 price.
Good Luck

[Bill Tubbs]

Drake prices...

Hey Bill,

I do not know how many returns you do; however they different plans. For first timers you can use the Pay Per Return plan. You buy the first 50 returns for $500 and then each additional return cost $10. On your second year you buy the entire package for $995. It is unlimited and includes 1040, All state returns, 1120 1065 990 1041 etc. There is no additional charge for EF. The software must be purchased before may 31 to get the 995 price.
Good Luck

Well, last year I show about 130 1040's plus a one 1120s and one 1065. Hopefully this year I'll end up with at least 160 1040's plus the two 1120s and one 1065, for which I paid $700 or so for. Maybe this off-season will have to look at prices and demos...

Thanks,
Bill