Printer Friendly Version
March 2010
Dealerships Face Significant Added Costs under Internal Revenue Service’s Interpretation of UNICAP
|
By Ed Blum, CPA (eblum@mbafcpa.com) |
The IRS has told auto dealerships that it is time for a change in the way they calculate UNICAP-- the Uniform Capitalization of Inventory -- and that it expects those changes during 2010.
UNICAP is a method of capitalizing certain costs for tax purposes. It takes a calculated deduction and moves it into inventory. Depending on your inventory turn, some of these costs remain in inventory at year-end and increase your taxable income.
UNICAP has become an urgent issue because in a Memorandum issued to examiners on September 15, 2009, the IRS said that it believes that very few dealerships are in full compliance with UNICAP rules because they are expensing certain inventory costs rather than capitalizing them.
Click here to read the rest of this story >>>
| Contact us: | |
| Tony Argiz, CPA/ABV/CFF, ASA, CVA, CFE Managing Partner targiz@mbafcpa.com |
Ira Silver, CPA |
|
Marc S. Dickler CPA |
Mark Thaw, CPA/ABV/CFF, CVA Partner mthaw@mbafcpa.com |
|
Manuel Rodriguez, Jr., CPA |
Phil Villegas |
 |
For a Copy of Phil Villegas’ latest industry insights as published in his monthly, column, please visit: www.wardsdealer.com or www.mbafcpa.com/Industries/Automotive2 |
The purpose of this newsletter is to provide general information on tax, audit and other issues related to the automobile dealership industry. The information contained herein may not apply to all businesses or organizations and their specific circumstances. Dealerships are encouraged to consult directly with an accounting expert before making tax and accounting decisions.
