Actually Mike, the purpose of depreciation is to match expense with revenue and not to reflect wear and tear on equipment or it's decrease in value. The whole concept was to prevent the deduction of an item in year one because it would distort net income dramatically in that year and, to a lesser extent, every year of the life of the asset. It also would understate the Balance Sheet assets. Now, that is Financial Accounting. If you were to account for things on a tax basis then we all know that IRC Sect 179, as amended numerous times, will allow you to do just the opposite. There is also the matter of bonus depreciation. The other issue is whether or not you could reclass an item as an investment to avoid depreciation. You can do this but would it be correct...no. There are items which legitimately fall into this category, though. I had a client who owned (to keep the privacy laws happy) I will say "a couple of unrelated businesses". He was a rich guy and liked to collect old trains. Not toy trains, but real trains. He bought these thru his legitimate businesses but we classified them as "other investments" so they did not affect income. As an investment, it would be a capital asset and any gains would be capital gains. A depreciable asset such as I believe we are talking about here is only subject to capital gain rules to the extent the gain exceeds depreciation taken. It is ordinary income up to that point. Not going to make the IRS happy if you start reclassing the assets I would think. Hope this makes sense, I typed it awfully fast.
Upload one or more videos to your post. Photo filesizes should be less than 300K and Videos, less than 2MB. Formats allowed are gif, jpg, png, ogg, mp4, mov, and avi. Be sure to use filenames without spaces or special characters, and filetypes of 3 digits lower case.
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 - The Tractor Parade: Story of a Case SC - by Bernie DeLon. On a early fall morning back in 1994, I opened the newspaper and happened to spy an article about a local antique tractor club having their annual show that weekend.
... [Read Article]
Latest Ad:
Sell 1958 Hi-Altitude Massey Fergerson tractor, original condition. three point hitch pto engine, Runs well, photos available upon request
[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.
