Posted by Mike (WA) on April 04, 2012 at 09:23:34 from (69.10.196.49):
In Reply to: Re: Cash sale posted by LAA on April 04, 2012 at 09:03:28:
Yeah, if he doesn't meet the income threshold to file, then its all a moot point.
But IRS is strange duck- If he was filing (or should have been), they want you to depreciate equipment used in a business or farm, even if, in the long run, it would have made no difference tax wise. If you're audited, they'll reconstruct it, back to the date of purchase, set up a depreciation schedule, give you the deduction in each of the ensuing years, then charge you depreciation recapture in the year of sale (up the the amount you had depreciated), then capital gain on any amount you received in excess of the purchase price.
You wouldn't get far with the argument that the baler is a "personal" item so long as you don't sell hay (I'm assuming he fed the hay to the calves). Anything used for the production of income is a depreciable asset, in the eyes of the IRS. Of course, this only comes up if you are required to file.
One side note- This whole thing only comes up when you sell the piece of equipment. Nothing says you have to depreciate it, if you plan on keeping it forever. It certainly is to your advantage to depreciate it, to get the tax deduction- but it only becomes an issue if you sell it.
We sell tractor parts! We have the parts you need to repair your tractor - the right parts. Our low prices and years of research make us your best choice when you need parts. Shop Online Today. [ About Us ]
Today's Featured Article - Talk of the Town: How to Remove a Broken Bolt - by Staff. Another neat discussion from the Tractor Talk Discussion Forum. The discussion started out with the following post: "I have an aluminum steering gear housing with a bolt broken off in it. The bolt is about a 3/8" x 1 1/2" bolt. I've already drilled the center of the bolt out with about 7/64" drill bit the entire length of the bolt. Only one end of the bolt is visible. I tried to use an easy out but it wasn't budging and I didn't want t
... [Read Article]
Latest Ad:
2022 John Deere 5045E, 4wd, front end loader and 3rd function with grapple. 120 hrs, 55k new, must sell
[More Ads]
All Rights Reserved. Reproduction of any part of this website, including design and content, without written permission is strictly prohibited. Trade Marks and Trade Names contained and used in this Website are those of others, and are used in this Website in a descriptive sense to refer to the products of others. Use of this Web site constitutes acceptance of our User Agreement and Privacy Policy
TRADEMARK DISCLAIMER: Tradenames and Trademarks referred to within Yesterday's Tractor Co. products and within the Yesterday's Tractor Co. websites are the property of their respective trademark holders. None of these trademark holders are affiliated with Yesterday's Tractor Co., our products, or our website nor are we sponsored by them. John Deere and its logos are the registered trademarks of the John Deere Corporation. Agco, Agco Allis, White, Massey Ferguson and their logos are the registered trademarks of AGCO Corporation. Case, Case-IH, Farmall, International Harvester, New Holland and their logos are registered trademarks of CNH Global N.V.
