I have conventionally used a 5-year life for big rigs (e.g. "Big Joe and the Phantom 309"). II have avoided use of a 3-year life because the impact is so much ahead of true economics that it produces a sawtooth effect on P&Ls from year-to-year. Also in growth syndromes, the early benefit would really be better off spread across more years.
This year, a customer with 30 of these rigs needs to "go for broke" in saving taxes, and is willing to take it on the chin in later years after some debt is retired. So I'm going to have a conversation with him about the ups and downs.
According to TTB, 9-8, the tractors are eligible for 3-year life, leaving me to assume the trailers are 5-year property. The mid-quarter convention for first quarter allows a depreciation of some 58% in the first year without even taking s. 179. This is extreme, but I will present it to the client. (This client has complained in prior years about the AMT - you can't have your cake and eat it, right?)
Any other comments that might be helpful??
This year, a customer with 30 of these rigs needs to "go for broke" in saving taxes, and is willing to take it on the chin in later years after some debt is retired. So I'm going to have a conversation with him about the ups and downs.
According to TTB, 9-8, the tractors are eligible for 3-year life, leaving me to assume the trailers are 5-year property. The mid-quarter convention for first quarter allows a depreciation of some 58% in the first year without even taking s. 179. This is extreme, but I will present it to the client. (This client has complained in prior years about the AMT - you can't have your cake and eat it, right?)
Any other comments that might be helpful??
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