BU357 Lecture Notes - Lecture 11: Sinking Fund, Contingent Liability, Accounting
Document Summary
Barter transactions: sales revenue equal to the fair market value of the goods or service provided must be recognized in income for tax purposes. If an expense is not in the act, it is usually deductible for tax purposes if the expense is: deductible using generally accepted accounting principles, not a capital expenditure. Incurred to earn income for tax purposes: not a personal expense or expenditure, reasonable in the circumstances. Deductible for accounting purposes buy not for tax purposes: deductible for accounting purposes but not for tax purposes, write down of property to fair market value, amortization, any deduction for capital expenditures. It is also hard to estimate environmental clean up costs, even though it is used for gaining or producing income from the business or property, it is not deductible. It is not deductible if it is an outlay of a capital nature.
