*NEWS*BUY NEW EQUIP.BEFORE TAX LAW CHANGE /2004-09-03

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*NEWS*BUY NEW EQUIP.BEFORE TAX LAW CHANGE /2004-09-03

 user 2013-06-22 at 9:46:25 am Views: 78
  • #2055
     
    Customers: Buy New Equipment Before Tax Law Changes

    Tax laws dealing with depreciation write-offs will change at the end of the year, which means that now is the time to think about acquiring equipment.

    Current US Tax law lets companies write off an extra 50 percent of an asset's value in the year that it is acquired, and the incentive was created to stimulate industry purchases and manufacturer growth after the September 2001 terrorist attacks in the United States. For example, a company with taxable income of $500,000 that is making a purchase of $250,000 will get a bonus depreciation write-off of $125,000 in 2004, plus a standard depreciation of $25,000; if the purchase is made in 2005, the total write-off will only be the standard of 20 percent, or $50,000, to write off. "If you're looking to get equipment in 2005, even though you might have to borrow money sooner, it's still worthwhile," Frost Leasing's Harry Kaplun points out. "And if you are going to acquire it next year anyway, you should be thinking about buying or leasing it now."

    * Post was edited: 2004-09-03 10:30:00