S-Corp Income Question

[geekgirldany]

Customer started a new business and is established as S-Corp. He owns a carlot. Well as I was going through his bookkeeping there was a check made out to a jeweler for several thousand dollars. I found out this is where he bought a piece of jewerly and he later sold it. When he sold it he ran the money through his company. The check was wrote out to the company not him.

Since this is not his normal product he sales should this be treated differently? He did sale it at a profit. I thought about just leaving it as income and him paying regular taxes on it since everything was run through the company. Would this be okay?

Thank you for any help

[Unregistered]

Since this is not his normal product he sales should this be treated differently? He did sale it at a profit. I thought about just leaving it as income and him paying regular taxes on it since everything was run through the company. Would this be okay?
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I would treat the jewelry as an investment and use those rules when disposing of it.

[Unregistered]

off the top of my head it's STCG

although, if the jewelry were used for personal purposes (wife, girlfriend, mistress, etc.) it should be a dividend.

JoshInNC

[geekgirldany]

thanks for answering. I guess it really was an investment as he bought it at a good price and then resold at a profit.