View Single Post
Old 01-11-2013, 06:56 PM   #59 (permalink)
HoustonCPA
Member
 
Join Date: Aug 2012
Posts: 71
Default

Quote:
I buy a lot of private collections and of course I pay with cash. The seller would never trust me with a check bec they don't know me. If I would be audited what would I need to prove that I spent the money? It is hard to get reciepts from people that I am paying cash to. Could I keep my own records like write my own receipt or keep it in a note book? Would the IRS accept that? I do have the bank statements that show cash withdrawals, does that help? Thanks
Whenever possible, get a receipt. It sounds to me that you know up front the cash value of your purchase and withdraw just that amount from the bank each time. If you do not receive a receipt, I would write on the withdrawal slip the contents of the purchase as the slip would already contain the date and amount of the purchase. In absence of those, I would write your own receipts for your records and keep any other form of proof you can obtain that would also document the purchase.

Quote:
I've always heard "postmarked by January 31". Not sure where this end-of-February stuff came from.
I have this backwards in the OP. The 1099, much like your W-2, has to be postmarked to the recipient by January 31st. The IRS's copy is not due until February 28th. I would still wait to the end of February if you believe you should receive one as some preparation may be delinquent.



When I get some more time, I will update the OP for the additional questions in this thread.
HoustonCPA is offline   Reply With Quote