Refer to the IRSs ATG on Auto Dealership. Suppose a dealer sells a car to a customer
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Question:
Refer to the IRS’s ATG on Auto Dealership. Suppose a dealer sells a car to a customer for the following:
Sales Price (including Sales Tax and license fees) $10,000
Less: Down Payment 1,000
Balance to Be Financed $ 9,000
Finance Charge at 10% 900
Face amount of Installment Note $ 9,900
The dealer sells the note to a finance company who agrees to pay the dealer a 20% commission on the finance charge, or $180.
(a) What is the correct entry to make?
(b) Referring to J.R. Hansen, SCt, 59-2 USTC ¶9533, 360 US446, 79 SCt 1270, when is the amount held back taxable to the dealership?
Related Book For
Cost Management Measuring Monitoring and Motivating Performance
ISBN: 978-0470769423
2nd edition
Authors: Leslie G. Eldenburg, Susan K. Wolcott
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