whimsica <whimsica[at]aol.com> wrote:

- quote -

If the business deducts the amount it paid you, then you owe
taxes on the amount you were paid. Since the business is a
sole proprietorship, I see no benefit.

Seth

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whimsica wrote:

- quote -

If you paid yourself, it would be additional income. Are
you reporting the income? Or do you think you can deduct it
and omit it from your income?

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I am a sole proprietor who got a grant from the dept of
education to develop physics education software for my own
business which develops educational products. I developed
the software with a partner and paid myself out of the grant
for doing so and paid my partner also. The entire grant is
taxable as income for me. I can deduct the development costs
contributed by my partner, but what about the money I paid
myself for developing the software.

Shouldn't I be able to deduct using section 174 the cost of
the software development even though I did part of it
myself.

Thanks,

Dan

<< ================================================== ===== > << 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. > << ================================================== ===== >