Your client, Daves Sport Shop, sells sports equipment and clothing in three retail outlets in New York
Question:
Your client, Dave’s Sport Shop, sells sports equipment and clothing in three retail outlets in New York City. During 2021, the CFO decided that keeping track of inventory using a combination of QuickBooks and spreadsheets was not an efficient way to manage the stores’ inventories. So Dave’s purchased an inventory management system for $9,000 that allowed the entity to keep track of inventory, as well as automate ordering and purchasing, without replacing QuickBooks for its accounting function.
The CFO would like to know whether the cost of the inventory management program can be expensed in the year of purchase. Write a letter to the CFO, Cassandra Martin, that addresses the tax treatment of purchased software. Cassandra’s mailing address is 867 Broadway, New York, NY 10003.
Step by Step Answer:
South-Western Federal Taxation 2022 Individual Income Taxes
ISBN: 9780357519073
45th Edition
Authors: James C. Young, Annette Nellen, William A. Raabe, Mark Persellin, William H. Hoffman