One of the most annoying things about preparing taxes is when you must state what section of the IRS code authorizes you are trying to deduct. How can anyone remember the zillion code section numbers and know what subject they cover?
SOMETIMES YOU NEED TO KNOW THE CODE SECTION NUMBER
The answer is that no one can remember all that. Fortunately, most of the time, you don’t have to cite a code section when you are preparing a return. But if you need to decide whether to report the sale of an asset on Schedule D or on Form 4797 and how to identify it if it goes on Form 4797, you may need to know which code section applies.
ELECTING TO AMORTIZE START-UP COSTS
If you form a partnership or corporation you may need to make an election to amortize organization costs citing the code section. Even a sole proprietor has to make an election to amortize start up codes under the appropriate code section. To make it more complicated the code section is different for each type of entity—corporation, partnership or sole proprietor.
I’M NOT GOOD AT MEMORIZING NUMBERS
A lot of tax preparers seem to talk in terms of Form numbers and code sections instead of more descriptive ways of identifying the subject they are discussing. I have a hard time even remembering my telephone number, and find it even more difficult to remember every Form number, code section and amount allowed for every conceivable item of expense, deduction or credit.
MY CHEAT SHEET
So how do I cope with it? The ultimate solution—use a cheat sheet. I’ve prepared a cheat sheet for the more commonly encountered Section numbers and the subjects with which they deal. Others are usually available in the index of my tax reference books. As a last resort I can also go to a web site that has them all.
If interested you can view and download my cheat sheet by clicking
IRS SECTION NUMBERS
LINKS and References – go to
To Contact me firstname.lastname@example.org
This information is not intended to be advice to the recipient. In compliance with Treasury Department Circular 230, unless stated to the contrary, any Federal Tax advice contained in this Blog was not intended or written to be used and cannot be used for the purposes of avoiding penalties.