You only need to report payments for services on a 1099-MISC.
If audited, you would need to supply a receipt for the purchase.
You can never deduct the "re-sale value". You can't deduct something you never had.
(Also be aware that your neighbor could be held liable for claiming the taxable income)
If you are deducting the amount as an expense on Schedule C or a business tax return, and the amount of the payment is more than $600, then yes, you should issue them a Form 1099-MISC.
No. It sounds like you are purchasing the bales for $0.75 each, right? You do not need to send a 1099-MISC for purchases. You only need to potentially issue them if you pay somebody for services for your business.
Right, purchased with the intent to sell later. Unfortunately our barn burnt down and all was a total loss. So I have the loss of the original purchase price as well as, fuel, bucking expenses and resale value.
You only need to report payments for services on a 1099-MISC.
If audited, you would need to supply a receipt for the purchase.
You can never deduct the "re-sale value". You can't deduct something you never had.
(Also be aware that your neighbor could be held liable for claiming the taxable income)
Okay thanks, that being said, would it be more advantages to claim this as an expense or a casualty on form 4684? I'll be using this form for the unpaid difference between what the Insurance company paid out under a "Coverage limitation" and what they determined to be the Actual cash value of the barn. More than enough to meet the required 10% of our AGI. Or would you rather I posted this question under a new topic?
You are more than welcome to post a question to start your own thread.
Form 4684 is to report a personal causality and loss, but it must be attributed to a federally declared disaster occurring in 2018 and/or 2019 to be used on your 2019 tax year return.
Be careful if you claim a business expense or loss. The basis in the barn is the lower of your cost or the Fair Market Value. The insurance company may say that the value of the barn was 25,000, but if you only paid 10,000, that is your basis, not 25,000. So the loss would be figured on that lower amount.