[Jewelry making - Article 00061] - Re: [Orchid] Consignment and taxes

[Kimberly Starbard]

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Hi Alana:

>     Wholesale, yes, but still income that you would report on your IRS
>     form and pay tax on?? I would assume a 1099 would record an
>     expense paid out by the gallery so that they don't have to pay tax
>     on the amount of money you made. 

    The gallery should actually not affect income/expense with
    consignment type sales. An example: You have a piece consigned to a
    gallery and it sells. The accounting entry made at that point would
    be: Debit cash (for the total sale) Credit sales (for the commission
    on the sale that the gallery keeps) Credit Accounts Payable-Alana
    (for the amount of the sale that will be sent to you) 

    Taxes are so complicated it's unfair. It's one reason I changed
    careers. 

    Good Luck in the coming tax season

Kim Starbard
Cove Beads

 
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