USA Marketing as a business

Mar 28, 2014
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Hi all,
Can someone direct me in the right direction on this. We are a marketing company that generates leads for our clients.

A major part of our business is retailing leads that we bought wholesale.

On our tax return, our CPA listed the cost of leads bought in Schedule C under part V (Other expenses) and described it as "Marketing Cost". Shouldn't this "marketing cost" be listed elsewhere on the form, since it's a part of our core business?

My concern is that the way we have it now would raise a red flag, since it would look like our marketing cost is disproportional to our revenue. When it's in fact our core business, not marketing cost.

Any insight on this would be greatly appreciated.


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