Have a new S corp client retailer with 29 fixed assets of which 12 are different trucks and vans. Previous accountant used and MACRS & S/L for book purposes and MACRS for the 1120S. Explaining the differences to the (sole) owner and he gets confused. Any reason why not to use tax depreciation on the books also? I try to keep it simple for small businesses and they are only interested in taxes. G/L only shows fixed assets in four different categories. Gross revenue about $2M. Thanks.
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I explain to clients who ask that I keep two sets of books for them. They raise an eyebrow and ask "is that legal"? grin
I have always used straight line for accounting work, and then generating an alternate schedule using MACRS. At year's end that macrs schedule may be modified for the amount of section 179 taken of course.
Straight line is the conservative way and conservatism is one of the cardinal principles of accounting.
Besides, financial statements look better to the bank for loan purposes.ChEAr$,
Harlan Lunsford, EA n LA -
Thanks
Makes sense and I appreciate your insight.Comment
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