Supplies regularly consumed by the taxpayer in the ordinary course of trade/business; Advertising/promotional expenses; In-house employee compensation; Costs to defend a business. (AE Staley Mfg. Co. v. Commissioner); Author’s expenses including writers, photographers and artists – – accrued in the trade or business. (§263A(h)). The individual must (1) be self-employed or own substantially all the stock of a personal service corporation, and (2) the expense must be a creative expense”. “qualified Letters, Memoranda and others property”. “similar Includes drafts, speeches, manuscripts, research papers, oral recordings, personal or business diary, log or journal, corporate archive, office correspondence, financial record, drawing, photograph or dispatch. Reg. 1.1221-1(c)(2). of Property = COST, except as otherwise provided. (§ 1012) What is cost? When taxpayer pays with cash, basis = amount of cash paid. When part of amount paid is in the form of recourse or non-recourse debt, the amount of debt is a part of the basis of the property. When taxpayer receives property in exchange for services, basis = FMV. When taxpayer exchanges property for property, basis = value of property received. Exceptions to basis = cost: When taxpayer makes bargain purchase, basis = FMV. When property is acquired by GIFT: Basis for determining GAIN = transferred basis from donor. Basis for determining LOSS = donor’s basis or FMV at time of gift, whichever is lower. If no gain or loss results from above calculations, in man’s land” no tax effect. “no If taxpayer can’t determine basis, basis = FMV. When property is acquired from a DECEDENT:
Supplies regularly consumed by the taxpayer in the ordinary course of trade/business; Advertising/promotional expenses; In-house employee compensation; Costs to defend a business. (AE Staley Mfg. Co. v. Commissioner); Author’s expenses – including writers, photographers and artists – accrued in the trade or business. (§263A(h)). The individual must (1) be self-employed or own substantially all the stock of a personal service corporation, and (2) the expense must be a “qualified creative expense”. Letters, Memoranda and others “similar property”. Includes drafts, speeches, manuscripts, research papers, oral recordings, personal or business diary, log or journal, corporate archive, office correspondence, financial record, drawing, photograph or dispatch. Reg. 1.1221-1(c)(2). of Property = COST, except as otherwise provided. (§ 1012) What is cost? When taxpayer pays with cash, basis = amount of cash paid. When part of amount paid is in the form of recourse or non-recourse debt, the amount of debt is a part of the basis of the property. When taxpayer receives property in exchange for services, basis = FMV. When taxpayer exchanges property for property, basis = value of property received. Exceptions to basis = cost: When taxpayer makes bargain purchase, basis = FMV. When property is acquired by GIFT: Basis for determining GAIN = transferred basis from donor. Basis for determining LOSS = donor’s basis or FMV at time of gift, whichever is lower. If no gain or loss results from above calculations, in “no man’s land” no tax effect. If taxpayer can’t determine basis, basis = FMV. When property is acquired from a DECEDENT:
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