Joe, we will be sending out a synopsis of the live blog next week. However, your staff may also watch the replay of the live event on our blog. Thanks for your interest.
Assuming a 3115 is filed for an automobile dealer. I’m unclear as to what costs would have to be capitalized as purchasing costs. Assuming the 1/3 2/3 election is in place, do you think a portion of the used car manager’s salary should included? What about the parts manager?
Typically, the only purchasing costs that need to be capitalized are the labor costs attributable to purchasing activities when such activities constitute more than 1/3 of an individual’s time. In your situation, the specific purchasing activities (examples would include selection of merchandise, maintenance of stock, purchase ordering, vendor maintenance, and comparison and testing of stock) of the used car and parts managers would need to be examined to determine if more than 1/3 of their time were spent on such qualifying activities. If not, then none of their wages would need to be included as purchasing costs.
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