More self employed questions

[Andyman]

In 2006 I bought about $8K worth of needed equipment for my business and am depreciating it over 5 years. Along with that, my attorney and I used the $1500 in tools of the trade on the BK form. I bought no new equipment in 2007. I also list on my tax return that I have about $4K in inventory of supplies that I sell in my retail store. I mailed all the required information, last two years tax returns, insurance papers, last two months bank statements to the trustee today. My 341 is Jan 8th. Now I'm getting worried that he will look at the equipment and that it will pose a problem. He will see by the last two years tax returns as well as the last two months bank statements that I am down almost 30% from the previous year. My attorney and I have proposed $300/month and that is for my truck payment and his fee. How close does the trustee scrutinize the tax returns versus the bank statements?

[HHM]

I am not sure what you are asking?

Are you concerned about the value of the equipment and getting an exemption, or did you try to use the Depreciation as an expense on Schedule J. If the later, you can probably kiss that expense good by, neither the IRS nor BK accept depreciation as an expense in this scenario...after all, it really is a phantom expense.

[Andyman]

I am not sure what you are asking?

Are you concerned about the value of the equipment and getting an exemption, or did you try to use the Depreciation as an expense on Schedule J. If the later, you can probably kiss that expense good by, neither the IRS nor BK accept depreciation as an expense in this scenario...after all, it really is a phantom expense.

Some of the equipment I bought for classes that I teach, I have sold in early 08. I guess what I'm asking is, does that equupment have any bearing on the $1500 in tools I'm allowed to deduct being self employed. I know I'll take a tax hit because of selling some of it but that's fine. I just don't understand how a self employed person that has tools that are well worth over the allowed $1500. I only take home about $1200/month and all that is verified by my bank statements and my tax returns. I guess I'm somewhat worried that the trustee could say..."sell off some of your stuff" and if I do that then I can't make any money. (BTW, I'm in Oregon).

[ready2puke]

I'd be more afraid of the trustee taking your equipment and selling it himself

[Andyman]

I'd be more afraid of the trustee taking your equipment and selling it himself

if he did that then I'd be broke and homeless...then what?