Message Font: Serif | Sans-Serif
No. of Recommendations: 0
"You're almost right. The "almost" part is that someone in construction might have to treat undeveloped land as inventory and not capital gains property.

I believe that Peter, and I know that I, was reacting to the position being taken by the construction guys in your original post when referring to a fraudulent return. Sorry for the confusion."

Ok, thanks.
So if it's treated as inventory, I'm right that it would be expensed as COGS when it sells. So including it on Sch C in the year it sells, whether as an expense or as COGS would amount to the same profit and thus the same tax, right?

And if they treat the land as capital gains, that is fraud. Just to make double sure I know what you are saying.

I thought the IRS definition of fraud was intentional attempt to cheat. I guess intention is hard to prove though. They think they are doing it properly. But I guess a judge would have to decide if he believes them if they got audited and hauled into court.

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.