Re: Re: Re: Writing off a new horn


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Posted by Rick Denney on January 28, 2004 at 13:04:13:

In Reply to: Re: Re: Writing off a new horn posted by Urbie Watrous on January 28, 2004 at 12:29:49:

1.) You know that a $2000 tuba will be worth $2000 in five or ten years if you take care of it.

2.) You tell the IRS that the tuba will decline in value over a period of years such that the decline in value costs you money, which you claim as a cost against income to determine taxable profits.

Is that telling the truth? You are telling the IRS something you know to be false, for the purpose of paying less tax. The IRS doesn't worry about it, because they know you'll have to pay it all back (and then some) when you sell it for $2000, thus proving that tubas don't decline in value and therefore are not a cost over time. The IRS doesn't keep track, except in broad categories, of what depreciates and what doesn't. They expect you to keep track of it for them, and if you don't do it right, they'll be happy to let you pay them the tax on all that capital gain.

If you want to do that, be my guest. I'm just saying what I would do.

Rick "draw your own conclusions" Denney


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