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SeaJay
09-17-2003, 06:27 PM
Most people start a lawn business before they register or get LLC. Most people buy equipment befor they are LLC or other inc.

If you purchase equipment before you are registered, LLC, SBA, etc. can you still use those purchases as a tax deduction?

June Bugs Mowing
09-17-2003, 07:31 PM
In Maryland where we are we had to buy the equipment while in business.We had a mower when we started and we could not claim it on the taxes.

Team Gopher
09-17-2003, 07:37 PM
I can't find a site with this exact situation but here are two sites that may help with further reading.

Writing Off Assets in the First Year (http://taxguide2002.completetax.com/text/c60s15d560.asp?style=8)

Writing Off Assets in the First Year Site 2. (http://www.toolkit.cch.com/text/P07_2930.asp)

Navig8r
09-17-2003, 08:43 PM
My accountant told me the write-offs are applicable when the equipment goes into service........ Bought a Lazer last year, biz started this year.... write-off this year... got it???

Oh yeah..... don't guess which one of us is right...... go see an accountant.

bruces
09-18-2003, 11:33 PM
Originally posted by SeaJay
Most people start a lawn business before they register or get LLC. Most people buy equipment befor they are LLC or other inc.

If you purchase equipment before you are registered, LLC, SBA, etc. can you still use those purchases as a tax deduction?

Yes!

If you form a one person LLC you are still filing as an individual.

Registration doesn't make any difference. If you are operating a business, you are operating a business and those expenses are deductible or depreciable.

If you buy equipment and then incorporate, different procedures apply, depending on whether you transfer the equipment to the corporation, lease it to the corporation, etc.

In this instance, check with your tax advisor.

work_it
09-18-2003, 11:59 PM
The worst part is the tax laws change quarterly. Guess it all depends on Congress and how they're going to fund their next pay raise. Check with your CPA.

JimLewis
09-19-2003, 03:02 AM
I think Navig8r gave you the best advice.

But I'll add this; Sometimes it's best NOT to let your new company write-off the expense of new equipment. Instead, you can use it as a write-off of your own (as a sole-prop.) and now that you've changed business entities, you can rent or lease the equipment to your company. It saves a ton in taxes and is a good way to earn income from your company!

Again, see a good CPA for more on all of this.