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Date:         Fri, 5 Dec 2003 08:29:09 -0800
Reply-To:     mark drillock <drillock@EARTHLINK.NET>
Sender:       Vanagon Mailing List <vanagon@gerry.vanagon.com>
From:         mark drillock <drillock@EARTHLINK.NET>
Subject:      Re: Volkswagen,the dumbest auto company in the world.. (NVC)
Comments: To: Gnarlodious <gnarlodious@EARTHLINK.NET>
Content-Type: text/plain; charset=us-ascii

Back in 1978 I worked for a small software company that purchased a 1978 VW Bus for use as a company vehicle. I'm SURE they got a tax write-off for it (AKA subsidy). That is how business investment rules have worked for many decades. IIRC, the Dems held the whitehouse and both houses of congress at that time. The controversy back then was whether VW vehicles should even qualify as they were an evil foreign import and were hurting US car makers with their practical and fuel efficient products.

Depreciation write-off rules apply to almost any business equipment purchase, even one of a Vanagon or Eurovan. A daycare center that buys playground equipment, a fence, or a Eurovan can depreciate that purchase if they follow the rules. This will reduce the tax bill of the daycare center operator as taxes are paid on net income after allowable expenses. You needn't be a corporation to qualify for business purchase write-offs.

The accelerated depreciation rules that have raised some people's hackles have been around for many years. The dollar limit for the amount that can be depreciated in the first year was recently raised for certain types of equipment. Hummers and RangeRovers along with some other vehicles that seem to inspire class envy among some Vanagon owners fall into a category that largely includes vehicles used by small businesses and farmers. Again, they don't have to be corporations though many are. Almost any business is likely to be a corporation these days as the use of a corporate status provides numerous legal and accounting advantages, even to small day care centers.

The first year write-off limit in question is not $10,000. It is now $100,000 as opposed to the long previous $25,000. That means that the purchase of a qualifying $100,000 vehicle can now be depreciated $100,000 in a single year instead of over 4 years of $25,000 increments. The total amount has not changed. The stated purpose was to encourage immediate investment by small businesses to stimulate the economy. Letting them deduct more in the first year and less in the later years rewards them now for spending money now though they may pay higher taxes later.

Presidents and their administrations do not make tax laws. Those laws are passed by Congress. If you wish to have your opinions known by those who can do something about it, contact your representatives. If you live in one of the 50 states you have 3 such representatives.

The US tax code is of dizzying complexity and I don't profess any comprehensive knowledge of it or even this aspect of it. If I made any egregious errors feel free to let me know.

Mark old computer guy from the age of Dinosaurs

Gnarlodious wrote: > > Entity Jeff Stewart spoke thus: > > >> that's EIGHTY EIGHT THOUSAND FREAKING DOLLARS.... > >> who the F**k is going to buy these things??? > > > > The same idiots who buy Hummers to drive to the shopping malls, of course! > > Jeff > By "idiots" I assume you mean Republicans. Don't forget the Bush > administration has s a $10,000 tax writeoff (AKA subsidy) to corporations > buying these vehicles. They're a LOT cheaper than the sticker price > suggests. VW wants a piece of the action just like every other car company. > > --Gnarlie


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