Question

Helping a Business Owner with a Tax Problem"

Kenneth, the owner of a catering company, needs business advice. He recently travelled to Massachusetts for a week for a trip and spent five days on business and two days to visit his family. While he was gone, one of his food trucks was damaged partially by vandalism and two grills were stolen. He is distraught. He does not know how to report the business expenses from his trip or the loss sustained from the vandalism and stolen grills. What are the potential tax consequences and what kind of record keeping do you advise Kenneth to maintain? Were there any components of the Tax Cuts and Jobs Act that impacted this area of the tax law?

Answer 1

For the fixed assets like trucks and grill

• For truck which is partially damaged and Stolen grill

Make the asset’s depreciation up to date.

Calculate asset cost

Writing off the asset’s from balance sheet

Calculate accumulated depreciation

Writing off the accumulated depreciation..

write the gain or loss, if

if any insurance claim is there should be mentioned.

For tax components -

If you lose asset due to accident or stolen you can claim your loss as a tax deduction. when you calculate the amount of your loss, you can either include the amount as the cost of goods sold .