CM-871 Overhead...
01-17-2018, (Subject: CM-871 Overhead... ) 
Post: #27
RE: CM-871 Overhead...
(01-14-2018 )DDlighttruck Wrote:  My accountant told me to be careful of tool purchases, if I decide to close the business down any tools that the company purchased should be included in what the business sells off when it closes. I suppose there would be a way for me to buy them from the business, but anyway that's what I was told.

(01-16-2018 )Rawze Wrote:  I would have fired the accountant.

Me too.
Tool purchases are completely tax deductible, they are "tools to do the job after all!"
In Canada, where it gets kinda concerning is 'major tool acquisitions', which is individual tools worth over CA$1000.00.
Example: high end electronic boroscope, quality thermal imager, large roller cabinet toolbox, welder, etc. These are considered 'Capitol Acquisitions' and must be depreciated over time as opposed to single tax year deductible. After 5 years, they are depreciated to "no residual value", so at that point, they are yours because they ar no longer "on the books".
Non Example: complete socket set (like say a full Snap-On set of 1/4" drive, 3/8" drive, 1/2" drive, and 3/4" drive with a short handle, long handle, and swivel head ratchet for each size). This is not a "single tool", but a conglomeration of multiple tools, and they would be listed individually by size on the invoice. Note: This WOULD NOT include an "Apprentice Set" or such, because that is considered a 'Captitol Acquisition'.
Of course tools would absolutely be a line item with a value attached to it on your business asset list/balance sheet, because they are not worthless. However at business closure time, it's not a big deal, because tools are typically broken down to small sets to be sold off at garage sales and such for $0.05 on the dollar, so your company can "bonus them" to you at $0.05 on the dollar as a taxable benefit upon closure/retirement. So your depreciated tools at end of career are worth say $10,000.00, so you end up with a taxable benefit of $500.00, even if you're in the upper tax brackets of 38%, that men's you'll pay Cousin Justin's descendent $190.00 in taxes to retain your tools...
Your accountant isn't too bright.


User's Signature: Why? Why do I always ask "why?" Because I can't learn or help teach others with "'cause I said so..."
replyreply
 Thanks given by: Wiseman , JMBT , rgreen


Messages In This Thread
CM-871 Overhead... - Waterloo - 10-20-2017,
RE: CM-871 Overhead... - Rawze - 10-22-2017,
RE: CM-871 Overhead... - JMBT - 10-22-2017,
RE: CM-871 Overhead... - Rawze - 10-22-2017,
RE: CM-871 Overhead... - Rawze - 01-16-2018,
RE: CM-871 Overhead... - Hammerhead - 01-17-2018



NOTE: Rawze.com is not affiliated, nor endorses any of the google ads that are displayed on this website.