Pgotography Business

[ruthc]

Sorry I put this with another 'hooby" thread. I meant to start a new thread.

TP has started to do wedding and special occasion photography to an existing small business (small business is only $2K profit with hardly any income). His wife is the breadwinner of the family. He bought lighting ($217), hard drive for computer for photos ($117) and misc items (total $406 - highest item for $217) from EBay. It appears he did a few weddings. I am not sure how to handle the depreciation on these items. These new rules confuse me. Maybe I am putting more into it then needed. I don't know what elections to have him make either. I would appreciate any help. Thanks a lot!

[TaxprepP]

It sounds as though the business may fall under the asset class 57.0 Distributive Trades and Services (Pub 946) as products are purchased and transformed into another product then sold. That being the case, then assets used would be 5 year property. The computer hard drive would fall under asset class 0.12 Information System , 5 year property, from Table B-1 in publication 946 How to Depreciate Property.

[ruthc]

Thanks a lot!

Thank you a lot for the info. It is really appreciated.

[oceanlovin'ea]

I have a couple of people doing a similar type business. The lighting and hard drive aren't going to be transformed into anything else. It is part of the equipment of his business. I usually put other items under supplies. Most put the pictures on dvd's now and don't give out paper copies.
One way to make sure he is serious about this being a business is for him to have a business plan. Does he advertise his work? Have business cards? A website? He might not make a lot of money in the beginning but if he pursues it he could do well.

Linda, EA

[Burke]

Sounds like a business. He made a profit. Doesn't seem to be employed elsewhere. And these items would qualify for the safe harbor election for full expense treatment on a Sche C.

[ruthc]

Thank You.

I also doubt if he would make a lot the first few days because he depends on his spouse's large salary so he doesn't work that much. I do think he might use the camera and parts to take personal pictures. I guess that would be normal. Should he comes up with a percentage to use or not? Right now the cost of the equipment is not that much so it may not matter right now. I would definitely keep an eye on it in the future.

[Lion]

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