ARTIST DEDUCTIONS

[TAXMAN]

TP started art and weaving business in 2013. Most all supplies etc went to start up in 2013. In 2014 TP spent about $6k for all kinds yarns and supplies. TP has no income from this venture in 2013 or 2014. What would you do with all these supplies that are needed to do loom weaving and art decorations? TP was formally an art teacher at local school b4 retiring. Thanks for the imput.

[MDEA]

Sounds more like a hobby than a business.

[Jack from Ohio]

Start up costs to be amortized once she actually has business income.  Till there is income, nothing to do with the expenses.

 

[Lion EA]

Inventory and unfinished inventory?

[michaelmars]

under TPR regs, since its reasonable to expect to use up the yarns  within the time period I would probably expense.

[Abby Normal]

Inventory and assets are not start up expenses. Supplies are an expense, so they would be a start up cost if this is a real business with a plan to make money, etc. Until then, it's just an expensive hobby.

[joanmcq]

Has she offered anything for sale yet?  That is the cut off date between start up & expenses. That said, I'd think the cost of the yarn would be in COGS/inventory. If she is weaving large pieces she knows how much goes into each piece. 

[TAXMAN]

Had some income  in 2014 but looks like 2015 will be better as tp is now listed as a loomer(what ever that is) and was featured in a a big state artisan event. I am leaning towards all these cones of yarn and etc being inventory and letting TP tell me how much is left. TP does have a separate bank account and a business license for this.

Edited June 22, 2015 by TAXMAN
fixed a couple of words