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- Apr 14, 2011
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Hello.. I have a used car dealership.. (sole proprietor) this is my second year in business and i am trying to finish up my tax preparation for 2010 year.. My question is that i had multiple cars in my inventory at the close of 2010 year.. These cars are written off at the end of the year for the full price purchased.. Now in 2011 if i sell one these cars it will count as a profit of the full amount of whatever the car was sold for..
Example:
$10k car purchased in 2010 sold for $11k in 2011 will create a $11k profit right off the bat in 2011 therfore causing a high profit at the end of 2011 making me owe big time.. Is this the correct procedure or is there a way to just report profit/loss when it happens no matter what year i bought the car (inventory)??? Thanks in advance for any help...
Example:
$10k car purchased in 2010 sold for $11k in 2011 will create a $11k profit right off the bat in 2011 therfore causing a high profit at the end of 2011 making me owe big time.. Is this the correct procedure or is there a way to just report profit/loss when it happens no matter what year i bought the car (inventory)??? Thanks in advance for any help...