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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12059
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 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,

Lane

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