Hi, a friend just started a small LLC and I am "helping" him with his taxes (I am an Acc. student). Everything was going fine but I got stuck with this problem:
The company owns 3 trucks, that are used to provide long distance freight, those trucks usually use about $3,000 worth of diesel, per job. There is almost no profit after paying the driver and fuel. And I cant find a place in the form 1065 to deduct the diesel expense, the only place I can think of is Other Deductions line 20.
In my opinion it is part of the cost of providing a service, so it could be like COGS, but because it is a service company, there is no inventory therefore I cant use COGS, am I right?
The IRS stated: "If your business manufactures products or purchases them for resale, ... to determine your cost of goods sold."
Can anyone pleas help me with this??
Thank you in advance.
G. Hinojosa
The company owns 3 trucks, that are used to provide long distance freight, those trucks usually use about $3,000 worth of diesel, per job. There is almost no profit after paying the driver and fuel. And I cant find a place in the form 1065 to deduct the diesel expense, the only place I can think of is Other Deductions line 20.
In my opinion it is part of the cost of providing a service, so it could be like COGS, but because it is a service company, there is no inventory therefore I cant use COGS, am I right?
The IRS stated: "If your business manufactures products or purchases them for resale, ... to determine your cost of goods sold."
Can anyone pleas help me with this??
Thank you in advance.
G. Hinojosa
