Left holding the bag

There is a lot to learn about scrap.
I feel just learning how to work metal is a daunting task. It is very easy to get caught up with the fever . Well my fever is down and now i see ramifications. First I see that wile in the past i was so happy to take scrap off people for 40% value or even 50% now i see , it's yours truly who gets the responsibility of the bill . In other words I go to a home that people have say $400 worth of metals GREAT!! . So i pay them $150 I get the rest and whamo it looks like i made $400 clean. NOT GOOD . So for 2012 I am getting organized . Each customers purchase can be small but i see in the long run one can have income with out a proper tax deduction.
Do I have to get a signature from person or is just keep track it . I don't feel people will do business with me if i start asking for signed receipts for a old grill. They might say to them selves leave me be I'll put it to trash!! The concept of stolen metals is not an issue the items i get are old and clearly not stolen . but i see a need for a paper trail as to its original owner . Finding for free is ok as if there is a tax hit at least it's found . I don't want to pay tax on $400 when all i got was $250.
Tomorrow I am to empty a store of old steel tin copper and split the proceeds with owner . I feel value of about $500 or a bit less is possible now i have this PIT feeling and the innocent happiness is gone
This i know after cashing in I'll write down the amt i give him, I can take a picture of area & address of building , This man is not going to want to bother with signatures for $200 , after this he has a 3000 LB steam burner & pipes (it's a great find) and he wants his cut.
ANY TIPS ? as i don't want to dig my own grave .

Wil your yard do a split ticket and issue a check for the split?

I'd say they will do this with proper verification from a person i want to split items with.
i will see if they will do it for me based on a business card from owner. I think the yard will think i am just being shady. But i'd be happy with a check for customer as I can't cash a business check to some body elses name

Good written records go a loooong way with anyone questioning your records. Although it is not as good as a receipt from the person, I believe that they are the ones that need to prove that your book keeping is innaccurate. If you walk into an audit with stacks of paperwork (purchases, sales, mileage logs, etc.), that show you are keeping good records, that should bode well with whomever you are facing.

This is just opinion and not based on actual experiance, so take it for what it is worth. If the numbers do not seem unreasonable they probably won't be questioned.

It works good for me, I don't have to keep track of everyone I buy from and my reciepts only show the net back to me.

Relax bro! You are stressing out for no reason.

Yes times are a changing! So one would expect things to change, This is how life goes!

I keep track of "cost of goods" as well as what I got paid. I don't get receipts, just keep track on Quickbooks. Usually, I'll note the name of the business person's name or address etc. I get a lot from and pay out to "Unknown", too.

Copper Head, you are a very conscientious man. But sometimes you seem to create worries for yourself. Mick and easy, just to mention two have talked about this before. Just take their advice, get quikbooks and relax like joe said. Best of luck with the new find.

Yes i down loaded the free quicken ,12 years ago I was very good with Quick books pro - when i used to do parole for some one, so it will come back to me . I'll just start to have a log book that I transfer to quick books. I am just adapting to a sales business that i see is different then a service painting business. With scrap THE VARIABLE IS get more scrap as all else is fix and set (price paid to us for metal)

Copper Head, May I ask you one question?

If so,. here it goes. Are you happy? Are you able to pay your bills?

Sorry that was two questions but I feel the forum would like to know.

This will help us realize your life as it affects you. You know to put in perspective as to what makes you be you!

Only knowing what your life is like can we understand where you speak from!

Do you have children? A mortgage? A truck payment due? You seem so stressed out all the time! Maybe just talking to someone would help. If so I would be willing to lend a listing ear! I*f you need a ear I will listen and try to help as best I can!

This goes for anyone needing a listing ear. I to am feeling very alone in these days. This is why this forum exists to share and feel as a group!

i pay by credit card or check. that way i always have a receipt. if you pay with cash you need a signed receipt.

if the irs were to audit you, how would you prove your expenditures that you write off?

that's great but there are many industries that are simply cash based, and the irs/government takes this into account. This holds true for not only scrap buyers but flea market/ebay/swap vendors who make cash purchases for resale. Keeping records for 1,000 $5 purchases is a bit much to expect.

Like others said, keep accurate records, mileage, bank statements, your ledger, etc, and you'll be fine. How you run your business is also important - there are a lot of red flags that the irs looks for, like business losses that are ridiculously large, really high costs of goods sold, high deductions for mileage, etc that signal you're gaming the system.

If you're expenses are "reasonable and ordinary" as they say, you'll be fine.

Kids yes - young also , Bills ,These days i feel I am all alone , I scrap and give all to the wife , I guess little problems happened 1) i have 2 trucks my cargo truck is down (just needs a starter) so that put a hurt on transferring the goods . 2) some guy i worked payments with for a trailer reneged and kept my money $200 . 3) I also buried myself with stuff so when i try to get it to market , all i feel is confusion as i have to organize the items. I am winning I am little by little cleaning up . 4) Guys I had DEP visit me ok !! AS Schwarzenegger said I'll be back , so will DEP to see progress.
So I guess I want to be ready on all fronts beyond reproach I worked hard so far but i dare say as one gets better at scrap some one is out to stop you.

What's DEP? It sounds bad!? It it similar to EPA I guess?

Copperhead RELAX ITS NOT THAT SERIOUS!

Department of environmental protection , I have not been given any summons dep guys were actually friendly told me what i had to do . Just unnerving when you see your being watched
sooo I am paranoid these days, I am a scraper, can't get off the boat now.

Ah, I understand now. We have OEPA here in Ohio.

I've got to watch my back too...fixing cars and selling parts (plus some scrapping) is my hobby, and we've got a nice piece of property here so I don't want to junk it up or upset the neighbors. But you gotta get the work done too....tough to balance!

junk it up or upset the neighbors so true
But I would like to back track , I see scrap in a different lite now ,sure when i first started ,trash into money ,then people want to give me metal . or i can be a real business man buy for .02 sell for .09 . There is absolutely a need to keep good records I'd say a cash business like this it's under stood you wont have all your receipts, I know this - each day $25 gas is a given receipt or not. some one told me that its possible that a scraper is entitled to .40 to .50 cents deduction per mile on work truck
the auto inspection receipt might be a keeper (that has mileage)
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All of us are a force , Many of us do have a title it's called - dismantle liquidation scraper . I feel it's relatively easy to find the goods , but the need to keep track of what it cost to get it to market is more important. If the gov decides to thin out the scraping force they will set the stage and act upon it.

i would suggest some of you get the advice of a good cpa or tax attorney. i would not want to go to an audit and try to explain 1000's of dollars of write offs with out any proof of them.

http://www.irs.gov/businesses/small/...=98575,00.html

The responsibility to prove entries, deductions, and statements made on your tax returns is known as the burden of proof. You must be able to prove (substantiate) certain elements of expenses to deduct them.