Is $117 for a 3 year laptop warranty even deductible, since the laptop could have been used in the business without purchasing it? Why am I finding it so difficult to find good info on this?
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Why not amortize over 36 months?Comment
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I agree with Gretel; it is probably supposed to be amortized over the life of the warranty.
It may not be correct, but for that small amount, I would just deduct it all in one year.Comment
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So would I.Originally posted by TaxGuyBillRoland Slugg
"I do what I can."Comment
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You could run your tax business without purchasing E&O insurance, does that mean it's not deductible if you do purchase it?
Here is a PLR that states extended warranties are insurance:
And here is how the IRS handles its own purchases, it expenses extended warranties on laptops.
"You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard
"That's enough! When you didn't know what you were talking about, you really had something! [to Curly]" -Moe HowardComment
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1 - Ruling you referenced:You could run your tax business without purchasing E&O insurance, does that mean it's not deductible if you do purchase it?
Here is a PLR that states extended warranties are insurance:
And here is how the IRS handles its own purchases, it expenses extended warranties on laptops.
https://www.irs.gov/irm/part1/irm_01...6.html#d0e1484
RULINGS
….. , This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of the Code provides that it may not be used or cited as precedent.
Question: ruling states “..ruling is directed only to the taxpayer requesting it.” so would that apply here?
2 - Question for below: Would this be how the IRS treats the Accounting treatment vs the Tax treatment?
Your comment “And here is how the IRS handles its own purchases, it expenses extended warranties on laptops.”
Excerpt from the IRS reference you posted:
…..FASAB is responsible for promulgating accounting standards for the United States Government. These standards are recognized as generally accepted accounting principles (GAAP) for the Federal Government. To ensure compliance with FASAB, it is critical that the IRS complies with applicable Federal financial accounting standards for all property and equipment.
3 -Have you looked at this Other reference (Sec. 461 All-Events Test:? Timing for Deducting Accrued Warranty Claims - See more at: http://www.thetaxadviser.com/issues/....8A3M0LDv.dpufAlways cite your source for support to defend your opinionComment
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Warranty expense
I found this link that might help with the warranty.
Is Warranty cost capitalized or included in cost of the asset?
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I wasn't trying to establish substantial authority. I was mostly just responding to user Coal who said it was hard to find anything relevant to the question."You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard
"That's enough! When you didn't know what you were talking about, you really had something! [to Curly]" -Moe HowardComment
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