Business Year End Spending

[S T]

Have a taxpayer that just notified me for year end spending

Equipment order/purchase date is 12/27/2013, however, taxpayer used a credit card which was not charged until the actual shipment date which was 1/2/2014

Is this purchase a 2013 purchase or a 2014 purchase?

Thanks

Sandy

[ATSMAN]

It is a 2013 expense when the order was placed using a credit card.

[BOB W]

I think you have a problem with "Place in Service" date............ 2014

[S T]

My thought - so please offer solutions or corrections

Credit Card usually has two columns - one is trans Date and one is posting Date, sometimes these don't exactly match due to processing - so I use Trans date at end of year

Order placed 12/27/2013, HOWEVER, CC charge was on shipment date of 1/2/2014 - In this case I suspect it is Trans Date which possibly is 2014 - will have to obtain the stmt to make sure

I was always taught if the CC card transaction showed 2013 trans charge, would be a an expense ( of course small items - etc) not major items

So I am thinking it is a 2014 date - one because of shipment date and of course "placed in service"

Thoughts,

Sandy

[BOB W]

My thought on "Placed in Service" was the equipment being ready to use date. Prepayment does not mean ready to use. I could be wrong but I would handle as a 2014 purchase and placed in service date.

It would be interesting to see what others think.

[JON]

It is

not "in service" if it is not in the client's facility, ready for use!!!!!!!!!

[TaxGuyBill]

If it is depreciable property (you said "equipment"), then it is not placed in service until 2014, and can't be used until 2014.

If it's NOT depreciable property, it's 'iffy'. I would say whenever the 'transaction date' (not the 'posting date') on the credit card is would be the deductible year.

[S T]

Thanks everyone,

Too many dates provided by client and importing into QB, thereby some of my questions and a lot of confusion with T/P - T/p was spending online - which we need to be mindful can be an issue between order date and actual receipt delivery date.

Only have a purchase order, confirmation of order, cc download to QB which on statement has 2 dates (transaction and posting dates) - finally got to the issue that T/p ordering for year end expenses, has not even received the Equipment (office equip) thereby not placed in service.

So all to be continued for this issue to 2014 date.

Sandy

[BOB W]

How much was the purchase?

[S T]

$ 1,400 for new computer and printer/scanner

Not a huge tax impact in that regard, just that t/p was doing some year end spending to try to reduce some profits - T/p had a really "good year"

Sandy

[JON]

It

has tio be available for use-i.e. hooked up set up and could have done 50 tax returns - so software is loaded, hardware is hooked up and your ready for the season - TAX SEASON... I actualy had two work stations put in 12/30/13. Even a new keyboard that when I hit "a" I laso hit caps lock and do not notice!!!

Happy New Tax Season guys.

[BOB W]

$ 1,400 for new computer and printer/scanner

Not a huge tax impact in that regard, just that t/p was doing some year end spending to try to reduce some profits - T/p had a really "good year"

Sandy

It is your choice on that amount. but I would bring it to 2014.