question on Maryland form MD-1

[Naveen Mohan from New York]

I am based in New York and this is first time I am doing a MD tax return with Schedule C.

I believe that in addition to MD 502 I also have to do MD-1.

My problem is that when I review last year ta return number do not make sense.

It is a convenience store with gas station.

Last year balance sheet on MD Form 4A is showing $ 20,000 cash and $ 41,800 other asset and $ 186 in equipment. NO inventory.

These number do not make any sense.

the way I understand is Maryland is defining inventory as all product available for sale including gasoline and all furniture and fixture inside the store is also taxable personal property.

My question is that before I start saying that other accountant did not do a good job, am I understanding the instructions correctly.

If my understanding is correct. How do I rectify this situation because there is going to be a huge variance between current year and prior year return. for example prior year return is showing zero inventory while the wholesale value of inventory in the store is close to $ 100,000.00.

thanks for your help.

Naveen Mohan

[jklcpa]

I have a gas station client. In years past he owned the gasoline that was in the tanks, and then this past year he negotiated a new contract that says he gets a commission on every gallon of gas he sells, but the supplier owns the gas in the tanks. Ask your client who owns the gas on hand.

Does he lease all the equipment?

[Naveen Mohan from New York]

Judy:

what about the inside convenience store inventory of convenient goods. doesn't he has to pay personal property tax on this inventory?

thanks

Naveen Mohan

[Abby Normal]

MD CPA here. The balance sheet doesn't really count on the Form 1. (By the way, only entities file form 1-sole props file AT3-51.) Average inventory gets reported on page 2 of the Form 1. It's nice if this agrees with the balance sheet, but it doesn't effect the valuation calculation that the state does. Some counties/municipalities don't tax inventory and some do. Inventory is supposed to be average of 12 months (ha ha!) but most do average of beginning and ending.