Deducting Gifts/Toys Received

[CrackerJacks]

Tom- I vaguely remember you mentioning at one point being able to deduct the cost of toys that were given/gifted to the childcare (even if I didn't purchase them). Did you say this or am I totally wrong here?

[TomCopeland]

Gifts

Tom- I vaguely remember you mentioning at one point being able to deduct the cost of toys that were given/gifted to the childcare (even if I didn't purchase them). Did you say this or am I totally wrong here?

Yes, you can estimate the fair market value of toys, etc. given to you and then depreciate them over 7 years. Take pictures of these items.

[AmyKidsCo]

You have to depreciate regardless of the value? I received a set of sand toys that probably cost $7-10 - it seems silly to depreciate over 7 years.

[CrackerJacks]

I was part of a program through out local RR agency. Upon fulfillment if the program I will be given toys worth a value of $1000. We will NOT be recieving a 1099 (as per the RR, contact). So do I still depreciate the $1000 worth of toys? I have the invoice of the order so I know exactly how much everything cost.

[TomCopeland]

depreciation

You have to depreciate regardless of the value? I received a set of sand toys that probably cost $7-10 - it seems silly to depreciate over 7 years.

I wasn't clear in my earlier comment. You can deduct these gifts in one year. If you got a gift before you were planning to go into business, you would have to depreciate them.

[TomCopeland]

depreciation

I was part of a program through out local RR agency. Upon fulfillment if the program I will be given toys worth a value of $1000. We will NOT be recieving a 1099 (as per the RR, contact). So do I still depreciate the $1000 worth of toys? I have the invoice of the order so I know exactly how much everything cost.

You must report $1,000 as business income. You can deduct the toys based on how you use them. If you used them 100% in your business, deduct 100% of the cost. If you also used them personally, then use your time-space % before deducting them.