The income must be reported to increase the amount of revenue the federal government has access to, but deductions are allowed, but not required.
In some instances, the tax implications of claiming the deductions ends up making the taxpayer's af
At one point, nearly the entirety of federal tax revenue came from excise taxes. They were phased out with property and income taxes, but they are
13 making a comeback, expecially on "sin taxable" items, such as cigarettes and liquor.
Sole proprietorship is out, because there are two owners. A partnership, an LLC or a type of corporation are
the only options. Questions that should be asked to determine the best fit include:
What kind of product or service are you offering?
Cash or credit is not relevant. Amount realized includes cash at time of sale and cash to be received in the future.
Mortgage assumption by the buyer increases the amount realized by the seller
Mortgage assumption by the selle
The date that an asset is placed in service is very important in determining
whethen the nid-quarter convention applies. If an asset is placed in service in
the first three quarters of the year, then it qualifies for the hal-year convention.
1 Outstanding liabilities and expected revenues
2 Equityholder's claims
1 Increased liability, lower net income on 2014 statement
2 Extraordinary event in 2015, no effect on 2014 financial statements
For different reporting situations, different reports
Answers are in bold
Additional Paid In Capital
Partial Balance Sheet
For Year Ended 12/31/2014