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Discussion Forum Index --> Tax Questions --> Last minute tax deduction
Therube (talk|edits) said:
| 31 December 2006
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| If a sole proprietorship made a credit card purchase for thier company on the last day of the year could they count it as a deduction for that year even if the item purchased would not be shipped until the following year?
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Solomon (talk|edits) said:
| 31 December 2006
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| Yes - if it appears on his statement as purchased on 12/31/06. I assume this person is on a cash basis.
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Therube (talk|edits) said:
| 31 December 2006
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| well he wants to purchase an item over the net. It may not show up on his credit card untill 2007 but he can get a purchase confirmation over e-mail dated 2006 from the company he's purchasing from. Would this be enough documentation to make it valid for a tax write off?
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Death&Taxes (talk|edits) said:
| 31 December 2006
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| Hold on, is he buying something that would be subject to depreciation? If so, it must be placed in service in 2006.
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Scot1 (talk|edits) said:
| 31 December 2006
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| Charge date on credit card statement must be 12/31/06 or prior as stated by Solomon if an item of expense. If a fixed asset, the item must be "placed in service" as stated by D&T prior to 1/1/07.
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Therube (talk|edits) said:
| 31 December 2006
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| Well he's buying a computer software package for over $1000. This of course will no be put into sevice until 2007. Computer software is subject to depreciation right?
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Solomon (talk|edits) said:
| 1 January 2007
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| Perchance the useful life is less than 12 months, then it can be expensed.
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