Computer Purchase

[Unregistered]

I am planning to buy a computer for my Sole Proprietorship and would like to write part of it off against this years income and part against next years. In the past, normally I write it off against the current years income but dont want to do that this time.

If I buy it on one of those no-interest deals, and actually pay for part of it this year and the rest next year, will I be ok doing what I want to do since that is when the $$ actually go out? Or will the IRS view it as having been bought all this year since that is when the computer will arrive?

[Armando Beaujolais]

You start depreciation when the computer is placed in service, no matter how you pay for it.

You can't choose to take a portion as Section 179 this year and a portion next year, except...

If your Section 179 deduction is limited because of the taxable income limitation, the unused amount will carry over and be available as a Section 179 expense the next year. That's the only way you can spread a Section 179 deduction over a two-year period.

You can choose how much to claim as Section 179. I'd claim what you want this year and depreciate the rest.

[jainen]

upgrade

You can buy the basic now, and wait until January to upgrade the monitor and the hard drive and the video card and the speakers. We all do that anyway, right? Because the pride of ownership only lasts until evening, when Grand Theft Teenager takes a spin.

[Unregistered]

I Enjoyed The Grand Theft Teenager Humor

[ED SMITH]

Depreciation

If you only expense part of the cost using sec 179, then the remainder is depreciated over five years (65% in the next 3 years). This is assuming that business use is over 50%. If not, the figures will change. Therefore, it is not possible to expense/depreciate over 2 years.
Teenager use contributes to non-business usage.
ED

[jainen]

teenager test

The teenager test is an ordinary and necessary part of the installation process. It always identifies deficiencies, especially in terms of the video card. There is no issue about personal use because after the 3-minute test the teenager will never again pay any attention to your business computer (unless you actually get the new graphics board, which you won't because it costs as much as the whole rest of the computer). The teenager will disparage the entire episode with the single slang term, "newegg."

[Bees Knees]

Congress ought to codifiy the teenager test. Everyone knows it is an ordinary and necessary part of operating a business with computers.

[Bird Legs]

Bees-What

do the members of congress know about business? Their expertise is more in the line of
talking.

[Unregistered]

The teenager, is your final tester, to be sure you have everything set up right. Put teenager on your payroll.........I don't have a teenager anymore, but my understanding is that they KNOW EVERYTHING, especially when it comes to computers.

[Snaggletooth]

Bonus Depreciation

Guest, why don't you look into the "Bonus" Depreciation which has been around
since 2001? Surely some combination of this and "normal" depreciation will suit
your needs. The only objective not met is having the computer fully depreciated at
the end of year two.

[Bees Knees]

Guest, why don't you look into the "Bonus" Depreciation which has been around
since 2001?

2004 was the last year for bonus depreciation, except for property with a life of 10 years or more and some transportation type property, which is allowed for 2005 only.

I don't have a teenager anymore, but my understanding is that they KNOW EVERYTHING, especially when it comes to computers.

I remember telling my dad that when I was a teenager. Then he got smarter as I grew older.