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Ask Lane Your Own Question
Category: Tax
Satisfied Customers: 11121
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I have a salvage business. I am paying someone to deliver a

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I have a salvage business. I am paying someone to deliver a product ($2500) who does not have a business license. Do I need to have them fill out a 1099, or can I just have them fill out a receipt with their information?

NPVAdvisor : Hi, This is just a transaction ... probably no need for the 1099 ... the reciept will show tht you have a basis of 2500 for when you sell it
NPVAdvisor : If you hold longer than a yearm it m,ay very well be a zero tax situationa (depending on your tax bracket)
NPVAdvisor : IF you haold it and sell in less than a year, the gain will ordinary income (sales price less 25000
NPVAdvisor : (sorry for the typos)
Customer: This is actually payment for delivery of a product.
NPVAdvisor : sales price less the 2500 ... long term capital gains if you hold it for a year ... ordinary income if you hold it for less than a year
NPVAdvisor : for the delivery only? or the product itself?
Customer: For delivery only. It is an airplane they are delivering
NPVAdvisor : the delivery charge is a current expense deductible against your business income
Customer: Do I need Name, address, phone included on the receipt?
NPVAdvisor : It would definitely be a best practice ... but necessary as with a 1099
NPVAdvisor : Just be sure to keep the receipt ... for an item this large
Customer: But a 1099 is not required?
NPVAdvisor : no
Customer: Great! Thank you!
NPVAdvisor : this not an ongoing service
NPVAdvisor : \but rather an incidental expense to the resalwe of the product
NPVAdvisor : a business expense
NPVAdvisor : do you sell planes repeatedly?
NPVAdvisor : this is for resale right?
Customer: No I think it is a one time deal with this particular individual. We sell parts for resale
NPVAdvisor : thats OK
NPVAdvisor : again it is part of your business
Customer: Thank you.
NPVAdvisor : if you were buying it for personal use, it would be a part of the price whch would go to basis if you ever sold it to someone else
NPVAdvisor : but here, it's simply a delivery of something you will sll for a profit
NPVAdvisor : YW
NPVAdvisor : Hi PJ, .../ just checking back in, as I never saw you come into the chat.If you wan to drill down on this further let me know. If this HAS helped, I would appreciate a feedback rating of 3 (OK) or better. That's the only way they will pay us here HOWEVER, again, if you need more on this, PLEASE COME BACK here, so you won't be charged for another question.Thanks,Lane
Lane and 2 other Tax Specialists are ready to help you

Thanks for the rating Ellen.

Again, the delivery charge here is a business expense, given your resale of parts.

Let me know if I can help further,


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