Got this address on the internet........I have a general question. Would really appreciate an answer. I have a C Corp...... I am planning on buying some expensive equipment........and I can buy it in Dec 2007. The salesperson told me that this would save me a considerable amount of taxes.
Is there any reason I can't pay for it and then Section 179 the depreciation in order to offset some profit.........even if I am not yet using the equipment. Robert
Robert, As your own personal professional tax advisor should have told you, the Section 179 law is very specific about the new equipment needing to be purchased and placed into service during the tax year. Just prepaying for something and not actually using it in your business until the next year will not fly. Any salesperson who told you otherwise is not telling you the whole truth and cares more about his/her commission than being honest. As you apparently understand, if you meet certain criteria you can expense out $125,000 in the year of purchase. You do not need to depreciate the equipment.
The good thing is that when the items are placed into service during the year isn't relevant. Starting to use a new piece of equipment on December 31 is just as good for the Section 179 eligibility as any other date during the year, assuming it is a calendar tax year. I have a primer on the section 179 on our website that explains in detail the fast depreciation rules. Check it out for more information.
It is a pleasure serving you.
Larry Kopsa CPA
