A continuation of my previous post (How to book the purchase of an existing business)...
My existing business purchased another business (in the same industry) at another location. We are not operating two stores instead of one. Should I create a new company for the second store (even though it is under the same ownership as the first store) or should I use classes to differentiate between the two? These are the two ideas I came up with but if there are others, I'd be glad to hear 'em.
Thanks!
I think you are saying that you are "NOW operating two stores" rather than "NOT operating two stores".
Personally, I would keep one set of books and use classes for each store.
Personally, I would restate the question in a manner that is understandable rather than have others guess what is going on.
Sorry for the typo...it was meant to be "now" rather than "not"
I appreciate the advice. Thanks again!
If you are operating under the same FEIN then I believe that the IRS expects you to have 1 company file. Your idea of using Classes to distinquish the 2 stores is a good one. Just be aware that classes will only work on your income statement accounts. If you need to distinquish between the 2 stores on your balance sheet then you need to set up separate accounts to accomplish this. Use a Parent account with sub-accounts for each location.
The IRS does not care how many files are kept, they do not care if records are kept manually or by computer.
Your idea of using Classes to distinquish the 2
That's not what I have been advised by my CPA associates.
There is no IRS rule - or law - that requires you to be able to read or write!
In the instant case, you do NOT have to conform to GAAP or GAAS.
Basic rule: If a CPA or an attorney tells you that you MUST do something, fire his ass. His job is not to tell you what to do; his job is to take your goal and make it happen.
As a CPA, I to, would most likely advise using a single company but for the reason that it simply makes sense to do so and not because the IRS requires it, which it does not. Not all advice given by CPA's are borne by a connection to tax laws just as not all advice given by doctors have medical implications.
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.