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Author: JABoa Big gold star, 5000 posts Feste Award Nominee! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: Re: Payment of Goods for Service Date: 2/2/1999 8:28 PM
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So, TheBadger, regarding #9410, are you telling us (and I think you are) that the retail value of that scanner is income to cherylyac, and she must pay self-employment Social Security taxes of 15.3% on that value when she fills her taxes out?

The fact that they took something out of her subsequent fees indicates to me this was something like a book advance. Whether there was a signed contract at the time is sort of immaterial.

If on the other hand they had not expected or got any work out of cherylyac, then it would be a gift to her (and not deductible as a business expense by them or recordable by her), even if she used it subsequently in her business.

I am just thinking out loud here and I have no personal interest, I just like to try to figure out from time to time whether there is any shred of sense in our tax system.
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