[TheForge] opinions of tax status

[Larry]

Thank You, that makes sense.

Larry

Dave Brown wrote:

> At 10:50 12/26/02 -0600, you wrote:
> >Another question on this same line........
> >     When we make an item, that  has $XXX.XX of steel in it, plus forge time,
> >coal and such, plus what ever other expendables were required to manufacture
> >it, plus labor.  And then we sell it to the customer for $XXXX.XX, how do you
> >determine the actual profit on the item for income tax purposes?
> >
> >Thanks,
> >Larry
>
> Larry,
>
> The difference between cost of materials, coal and such and the selling
> price and the selling price is your taxable profit in the case
> outlined.  That is unless the "forge time" is for someone else that you are
> paying a reportable wage to.  If you are the "forge time" then the total
> difference is considered as paid/earned by you and therefore taxable,
> income tax that is.  Sales tax, as some others have mentioned, is a
> different ball game altogether.  In that case the sales tax is applicable
> to the whole price that you charged the customer.
>
> Dave Brown
> Accountant/Auditor
>
> Some number of years ago I gave up a livelihood,
> In it's place I found a life.
>
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