Dealer status and cash accounting - Posted by Rick (VA)

import · March 30, 2004, 6:20pm

Posted by Tom (WA) on March 30, 2004 at 22:38:15:

Dealer status means that you are in the business of buying and selling. Are you in the business of buying and selling?

import · March 30, 2004, 6:20pm

Posted by Rick (VA) on March 30, 2004 at 19:20:34:

I am wondering if I would get dealer status in the state of Virginia if this would affect the cash account method. My accountant currently uses the cash accounting method for my deals. Does anyone know the answer to this question and if you do I would appreciate your input.

Thanks
Rick (VA)

import · April 2, 2004, 10:18am

Re: Dealer status and cash accounting - Posted by patsears

Posted by patsears on April 02, 2004 at 11:18:49:

Hey Rick,
Just wondering what part of Virginia you are located in? I’m in the Chesapeake area.

patsears

import · March 31, 2004, 7:55am

Re: Dealer status and cash accounting - Posted by Ellen Brenn (FL)

Posted by Ellen Brenn (FL) on March 31, 2004 at 08:55:32:

It is my understanding that you must use the same accounting method for IRS purposes unless you get a letter from them allowing you to change methods in mid-stream. You cannot change from cash to accrual or vice-versa without this.

import · March 31, 2004, 6:10am

Re: Dealer status and cash accounting - Posted by Michael (KCMO)

Posted by Michael (KCMO) on March 31, 2004 at 07:10:13:

Let me first qualify my answer by saying that I know very little about this. It is something I’ve been looking into, however, as I prepare for taxes this year and try to get set up better for next year.

Please don’t take my word on this, but I think I remember reading somwhere that being a registered dealer disqualifies us to use cash accounting to the IRS. I think I might have read that on John Hyre’s website, but I’ve been reading so many different sources that I can’t be sure where I read what.

Someone please correct me if I’m wrong.