?? Direct Sell

[S T]

t/p schedule C, that has direct sell of clothing products, downline of people under her.

Similar to Quixtar, and all of those plans.

question, she purchased $4800+ in demo/samples of clothes for people to try on and to show. Are these "samples" deductible as an expense or does it get placed into inventory.

Thanks

Sandy

PS This is my last one for 10/16/06, thank goodness.

[veritas]

If the items are held for sale I would treat as inventory. If they are used for demo purpose only then I would depreciate. five year property

I had a client involved in one of these things and she bought clothing in her size so she could demo. Of course she wanted to write them off.

[S T]

Good Choice

Thanks Veritas,

Good choice, and as you can see I am out of time!!!!!!

So I will depreciate over 5 years!!!

Thank you so much,

Sandy

[Gene V]

I have a real helpful guild from Quixtar on how to keep records and all kinds of question and answers on filing requirement—how to fill out your Schedule C, what is Gross Receipts (Retail sales, Performance Bonuses and etc.) Expenses (Advertising and Promotion, Personal Use Items and etc.) the guild is 23 pages.
If you want a copy you can e-mail me and I’ll send a copy –the file is 169kb in pdf format.

[S T]

Quixtar

Hi Gene,

Thanks for the support, I private emailed you so you had my email address. So maybe not for this client as it is so late on filing, but the info you have could be beneficial for the 2006 filing season.

Sandy

[Snaggletoof]

Sellable?

Sandy, are the items in the sample kit sellable just like any other inventory?

If so, real world experience indicates they will be sold or given away. If not, probably a good idea to depreciate the kit.

Sometimes the samples are of a smaller size and different packaging to distinguish them from other items for sale. This is a dead giveaway that the supplier intends for the items to be used as samples only.

Some companies like Avon have their people sell perfume and lotions, for example. And the sample kit contains various containers of stuff that are the exact same size and denomination of the inventory for sale. This "sample" kit won't last six months, except for the briefcase.