My son has a sole proprietorship and it's gaining financial steam and complexity. I know the basics of Schedule C but his business changes are presenting me with questions I'm not sure of.
I'm listing them all here. Feel free to answer only a subset if you like.
1. He just opened a commercial business location. He negotiated with his landlord cost sharing (70/30 in most cases) of several improvements - painting, flooring, electrical, signage. All improvements were done by contractors, the landlord paid the contractors, and my son reimbursed the landlord for my son's portion. My son's portion, per contractor, is over $600 in several cases. Does my son issue a 1099-NEC to the contractors or the landlord for the work done?
2. I believe he put down a damage deposit with the landlord along with his first month's lease payment. Is the damage deposit treated as a business expense this year and as business income in the future if it gets refunded to him? List it under "Rent or lease" on Schedule C?
3. He wants to buy a truck "for the business". If he does so, and let's assume it passes the ordinary and necessary test, can he both depreciate the truck and claim mileage? What combinations of depreciation and expenses are permitted? If he depreciates can he also expense auto expenses (fuel, oil change, etc.)? I am personally just used to claiming mileage at the business rate and I believe that normally covers maintenance, fuel, and depreciation.
4. He hired a web dev company to upgrade his company website this summer. I think the website cost needs to be depreciated - is 3 year straight line an acceptable method?
5. Regarding the site improvements in #1, for those parts where his portion exceeds the de minimis safe harbor, do they need to be depreciated as capital improvements even if it's not his building?
6. He bought various office furniture for his customer lobby - chairs, desk, cabinets, shelves. Where do I put these on Schedule C? It looks like he can use the de minimis safe harbor and list them under Other Expenses, right?
I'm listing them all here. Feel free to answer only a subset if you like.
1. He just opened a commercial business location. He negotiated with his landlord cost sharing (70/30 in most cases) of several improvements - painting, flooring, electrical, signage. All improvements were done by contractors, the landlord paid the contractors, and my son reimbursed the landlord for my son's portion. My son's portion, per contractor, is over $600 in several cases. Does my son issue a 1099-NEC to the contractors or the landlord for the work done?
2. I believe he put down a damage deposit with the landlord along with his first month's lease payment. Is the damage deposit treated as a business expense this year and as business income in the future if it gets refunded to him? List it under "Rent or lease" on Schedule C?
3. He wants to buy a truck "for the business". If he does so, and let's assume it passes the ordinary and necessary test, can he both depreciate the truck and claim mileage? What combinations of depreciation and expenses are permitted? If he depreciates can he also expense auto expenses (fuel, oil change, etc.)? I am personally just used to claiming mileage at the business rate and I believe that normally covers maintenance, fuel, and depreciation.
4. He hired a web dev company to upgrade his company website this summer. I think the website cost needs to be depreciated - is 3 year straight line an acceptable method?
5. Regarding the site improvements in #1, for those parts where his portion exceeds the de minimis safe harbor, do they need to be depreciated as capital improvements even if it's not his building?
6. He bought various office furniture for his customer lobby - chairs, desk, cabinets, shelves. Where do I put these on Schedule C? It looks like he can use the de minimis safe harbor and list them under Other Expenses, right?
Statistics: Posted by secondcor521 — Sun Nov 17, 2024 4:50 pm — Replies 1 — Views 212