Discussion:Confused... accounting method and bad debt
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(Difference between revisions)
| Revision as of 21:19, 7 October 2009 Marcellah (Talk | contribs) (geez...i'm getti) ← Previous diff |
Revision as of 21:43, 7 October 2009 Smokeytax (Talk | contribs) (I wouldn't think) Next diff → |
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| {{ForumReplyPost|UserID=Marcellah|Date=7 October 2009|Text=geez...i'm getting old. Forgot it was 09 already. }} | {{ForumReplyPost|UserID=Marcellah|Date=7 October 2009|Text=geez...i'm getting old. Forgot it was 09 already. }} | ||
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| + | {{ForumReplyPost|UserID=Smokeytax|Date=7 October 2009|Text=I wouldn't think he needs to pay tax on a receivable outstanding at the end of 2008 that he never collected.}} | ||
Revision as of 21:43, 7 October 2009
Discussion Forum Index --> Advanced Tax Questions --> Confused... accounting method and bad debt
Discussion Forum Index --> Tax Questions --> Confused... accounting method and bad debt
| October 7, 2009 | |
| My client has a consulting business and has been reporting "accrual" accounting. Now he wants to change to "cash" before filing his 2008 return, given that he was stiffed by a client for $80k in fees that he would prefer not to report as income.
Can client change methods now, today, for 2008 (via a 3115, obviously) to avoid reporting this income? Thanks | |
| 7 October 2009 | |
| If he is on the accrual method and it is truly an uncollectable debt is he not going to have bad debt write-off (expense) to offset the income? | |
| October 7, 2009 | |
| You're confused? I'm confused.
A. Has he filed prior returns on accrual? If so, tough, stuck without a 3115 and some good reasons, and I'd say it's too late for 08. If not, he can file cash basis no prob. B. Yes, if he has a letter from someone saying it's bad debt, then it's out for 08 anyway. | |
| 7 October 2009 | |
| it may not have become a bad debt until 09, is the problem | |
| 7 October 2009 | |
| I wouldn't think he needs to pay tax on a receivable outstanding at the end of 2008 that he never collected. | |
