Koios
Recreational Kibitzer
- Nov 12, 2012
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What? So buying farm equipment is taxed as farmer's personal income? I'm not a tax expert, but this seems very wrong to me.
Oh, and it seems like it is wrong:
New tax rules allow more write-offs for farm equipment purchases | Equipment content from Delta Farm Press
No. It's an asset, as is cash or A/R. But it's depreciable, in accelerated fashion if folks so choose. Thus the expense cannot be expensed at the time purchase, unless, and this common, equipment purchases up to a point, can be written off if bought before year end. Programs like that are common, to spur durable good sales to businesses.
But it's merely, in effect, depreciating it all at once as opposed to over a 5 year period.
Yes, but it helps to point out that the fact that someone who has over $250,000 in taxable income may have only been able to get a small portion of that in cash for themselves; reinvesting profits into a business often leads to little or no deductions and therefore a larger tax bill may prevent the owner from making those investments.
The price of poor planning.