"Jay Somerset" wrote in message
...
On Fri, 11 May 2007 14:09:41 -0700, "Matt Barrow"
wrote:

This is true. If it weren't the case no corporation would ever pay
taxes.
They'd just say the money they earned was going to be spent for widgets
at
some time in the future.

That's not how a pre-paid expense works.

It's not a damn prepaid expense -- it is a sinking fund (paid in capital).

Pre-paid maintenance (into a reserve account) is "paid in capital"?

It does not become an expense (prepaid or otherwise) until money actually
flow out to some third party.

That's what I said.

My suggestion -- go buy a book on accounting! Most of the posts in this
thread are seriously out of touch with accounting principles and/or
understanding of financial accounts!

Such as your claim of a sinking fund?


If there is no business that can (even in theory) earn a profit, then
there
is no depreciation expense and no insulation from liability through the
corporation.

WTF?


Second suggestion (to the OP) -- hire an accountant and/or a tax advisor
before you dig yourself into a hole that the IRS will trip over.


Third sugesstion to Jay: Blow it out your ass, you pompous prick.