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Old 06-26-2013, 10:36 AM
hackitdown hackitdown is offline
LawnSite Silver Member
Join Date: Apr 2004
Location: Groton, MA
Posts: 2,431
With the section 179 accelerated depreciation tax rule, does it make sense to buy a $10K mower every year? Or several mowers if you are a big operator?

Say you buy a mower for $10K, reducing your taxable income by the full $10K by taking the full depreciation the first year, then theoretically sell it for $8K the next year. Do you pay capital gains on the $8K? Even so, would it be better to pay only 20% capital gains on $8K ($1600) instead of 30% income tax/soc security/medicare taxes on $10K ($3000)? Is that how it works? Do guys cheat and not report the $8K sale of the asset (mower)?

Or maybe you buy a truck every year for $35K, and sell the old one.

Is anyone doing this section 179 stuff?

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