grubar30 said:Asy,
Am I missing something here? If I pay for materials then why don’t I get the receipts?
He's paid for the materials, presumably out of his business account. Even if he's passing on the exact cost, he still has to account for the expenditure come tax time.
If he gives you the receipts, his accountant is going to say... What did you spend this money on? He'll say... Well, I bought this stuff for this guy, but he paid me back... His accountant will say... Um, prove that you bought the stuff, how do I know you didn't just take the thousand (odd) dollars and spend it, and the entire amount the guy paid you is income???
See?
He has to be able to account for his expenditure. As I said before, if he can't prove that you were simply paying back his outgoing monies, then the whole amount you pay him must be declared as income.
Hope that's a little clearer this time...
asy