tanTALK - View Single Post

bjhcpa · 03-27-2003, 12:02 AM

I think buying in this industry has several advantages. The lease payments on these beds seem outrageous compared to what you could buy them for. Also the tax benefit is better when you buy now (unlike what all the leasing companies will tell you).

You can deduct up to 24k of equipment purchased under Sec. 179. Also, starting with the 2002 Tax Relief Act, any new equipment purchased after 9/11/01 gets to take 30% bonus depreciation in the year purchased. So if you bought 100,000. worth of new equipment (bonus depreciation only applies to new equip, not used), you could immediately deduct 24,000 under Sec. 179. The remaining 76k you would then take another 30% deduction of 22,800. That leaves you with a basis of 53,800. You would then take your regular depreciation on the 53,200. (Approx another 8 - 10 of deductions.

So in short 100k of new equip purchased gives you over a 50,000 deduction your first year.

I am a CPA as well as a soon to be salon owner. If you have any questions please feel free to ask. If i dont know the answer i can certainly find it out.

03-27-2003, 12:02 AM	#3 (permalink)
bjhcpa Join Date: Jan 6 2003 Location: Florida Posts: 257 Rep Power: 6	I think buying in this industry has several advantages. The lease payments on these beds seem outrageous compared to what you could buy them for. Also the tax benefit is better when you buy now (unlike what all the leasing companies will tell you). You can deduct up to 24k of equipment purchased under Sec. 179. Also, starting with the 2002 Tax Relief Act, any new equipment purchased after 9/11/01 gets to take 30% bonus depreciation in the year purchased. So if you bought 100,000. worth of new equipment (bonus depreciation only applies to new equip, not used), you could immediately deduct 24,000 under Sec. 179. The remaining 76k you would then take another 30% deduction of 22,800. That leaves you with a basis of 53,800. You would then take your regular depreciation on the 53,200. (Approx another 8 - 10 of deductions. So in short 100k of new equip purchased gives you over a 50,000 deduction your first year. I am a CPA as well as a soon to be salon owner. If you have any questions please feel free to ask. If i dont know the answer i can certainly find it out.