Discussion:Spec home punch list repairs
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Discussion Forum Index --> Basic Tax Questions --> Spec home punch list repairs
Discussion Forum Index --> Tax Questions --> Spec home punch list repairs
| 2 February 2008 | |
| Hi. A partnership builds a spec home and sells the spec home towards year-end. The partnership distributes the cash to the partners, but leaves around $10,000 in the checking account to pay for possible punch list items or repairs that the home buyer might come across over a period of 6 months after year-end. In February the partnership has to write a check approx $10,000 for a problem with the house that they buyer discovered. Can the partnership add this expense to the tax return which contained the sale or does another partnership return have to be filed the following year to report this?
Thanks! | |
Michaelstar (talk|edits) said: | 2 February 2008 |
| Cash basis - it is a deduction in the year the disbursement was made. Can not be added to the year of sale based on your post if cash basis. Method of accounting is elected on the initial return. | |
RoyDaleOne (talk|edits) said: | 2 February 2008 |
| A home builder is not "normally" on the cash basis for
cost of the homes. If, accrual basis you can accrue the item. If this is a warranty item look to warranty expense rules. | |
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