I have a new client that went into the golf cart business. Initially it was supposed to have been only for repair and service. But instead, it was expanded to include the rental of golf carts and sales of golf carts. Since the golf carts aren't going to be mainly inventory for resale, I need to know how to depreciate them. They aren't new, but will be repaired and serviced for customer use. Then possibly some of them will be sold. There are also issues regarding parts purchased to be capitalized into the depreciable cost. I realize the sales tax issue - but that's not my question. Sales of carts will of course be at the lower depreciated value at time of sale.
My question is - what is the proper depreciation method (MACRS, life-term, etc) for these golf carts assuming purchase by the corporation for rental use? Also on TTB, Page 9-7 it states at bottom of right column, Other Non-Qualifying property (for Sec 179 depreciation): "Property used for tax-exempt purposes except property used in connection with the production of income subject to the tax on unrelated trade or business income" as well as "Propety used by governments and foreign persons". Most of my client's customers will be schools, other exempt and government units that operate golf courses. Second question is - whether those 2 provisions will deny the Sec 179 deduction?
I appreciate any help and thank you in advance.
My question is - what is the proper depreciation method (MACRS, life-term, etc) for these golf carts assuming purchase by the corporation for rental use? Also on TTB, Page 9-7 it states at bottom of right column, Other Non-Qualifying property (for Sec 179 depreciation): "Property used for tax-exempt purposes except property used in connection with the production of income subject to the tax on unrelated trade or business income" as well as "Propety used by governments and foreign persons". Most of my client's customers will be schools, other exempt and government units that operate golf courses. Second question is - whether those 2 provisions will deny the Sec 179 deduction?
I appreciate any help and thank you in advance.
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