<user2084[at]hotmail.com> wrote:

- quote -

short answer - your're on target with your item "f" however,
you should find a local CPA to help you TODAY (not next
year)

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] > > -----> real address on hobokeni or hobokenx <-----

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I run a small software development business. My office is
the spare bedroom in my apartment, which contains a computer
desk where I work and a spare bed for guests. In 2006 I
purchased the following capital equipment for business use:

Computer monitors
Video card
DVD burner
Computer cables
Technical books

Total spent on the above is roughly $1K. My business
generated about $12.5K in revenue last year.

So I'm trying to figure out how to properly report these
numbers on my income tax forms. Based on my understanding
from reading Schedule C, the monitors, video card, dvd
burner, and serial cable are all capital expenses that must
be depreciated unless I take a section 179 deduction. So I
went to form 4562. Reading the instructions for that form,
it sounds like my capital equipment falls under the
definition of 'Listed Property' (since they are computer
peripherals) and they do not meet the exceptions clause
(they are not used exclusively at a regular business
establishment, since my second bedroom is not solely devoted
to my business).

So what I ended up doing was filling out the Part V Listed
Property section of 4562, line 26. I filled out columns a-d
+ i. I left the columns related to depreciation blank as I
was taking a section 179 deduction for each item. My capital
expenses spanned two forms and I didn't see a continuation
sheet similar to Schedule D-1 for this. I then went back and
filled out Part I and Part IV of form 4562 then put the
value in the appropriate box on Schedule C.

Finally, with regards to business use of the equipment, I do
use the computer monitors for personal reasons a small
percentage of the time.

My questions are:

a) Is my capital equipment 'Listed Property'?
b) In Part V of form 4562, should I leave the depreciation
columns blank?
c) Is the Identifying number field on form 4562 my Tax EIN?
d) Do I have to document every use of my computer equipment
(either for personal or business use) to compute the
business use percentage, or are conservative estimates
allowed by the IRS? I use my computer every day and it's
cumbersome for me to document how it's being used all the
time.
e) How do I deduct the books? I'm currently reporting the
books on Schedule C as 'Other Expenses'.
f) How do I find a competent professional to help me in
future years?
I've tried finding leads through friends but no one I know
has any contacts and I don't know how to quickly evaluate a
tax professionals expertise. I'm trying to learn enough on
my own so that I can make sure my taxes get done right, even
if I don't do them myself.

Sorry for the lengthy query. Thanks for any insight you can
provide.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >