Semi-OT - CBO: Electric cars are not cost-effective

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On Tue, 25 Sep 2012 22:51:18 -0400, " snipped-for-privacy@att.bizzzzzzzzzzzz"

If you are in business, you should get a tax number and not pay taxes on your widgets. The government get's their money from your customer. but we were talking about income taxes weren't we? You don't settle up on them until April 15. It behooves you to anticipate what that bill is and not send them a dime more than necessary to fulfil your quarterly obligation.>>>They only get the taxes we send them on quart lies and if you are doing

Hence your schedule C.

Think about what? I don't think an interest free loan to the government is a good idea.
You really sound like a guy who has made all of his money on W2s
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On Tue, 25 Sep 2012 23:18:19 -0400, snipped-for-privacy@aol.com wrote:

You're advocating evasion?

We are *not* discussing sales tax.

Again, wake up!

What are "quartlies" or a "quart lie"? Are you trying to say "quarterlies"?

No, you pay for capital tools *as* profit until you can write them down. "Accelerated" depreciation simply allows you to do it a little faster than Uncle Sam normally does. It should be instantaneous.

That's precisely what they're forcing you to do! Leftists would rather you just give them the money and not write the expense down at all.

You sound more and more like a leftist.
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On Tue, 25 Sep 2012 23:32:02 -0400, " snipped-for-privacy@att.bizzzzzzzzzzzz"

And it was on the >6000 pound trucks which brings us back to where we started. They could be fully depreciated in the year that you bought them. You can also do that with most computer equipment, among other things that are rapidly on their way to being obsolete when you open the box.
There is a good reason why you might not want to depreciate an asset too fast. If you depreciate it more than the delta of purchase to sale price, Sammy comes back for that money in a recapture.
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On Wed, 26 Sep 2012 01:44:53 -0400, snipped-for-privacy@aol.com wrote:

Right, another example of government forced suboptimzazion.

Depending on your business, rules vary.

No issue. The difference is a profit.
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snipped-for-privacy@att.bizzzzzzzzzzzz wrote:

If you're starting up a company, you would not want to expense items your first year when you have no sales. You'd want to depreciate them over the upcoming years when you have some actual revenue.
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On Sep 27, 9:37pm, " snipped-for-privacy@att.bizzzzzzzzzzzz"

More examples that KRW is clueless. As usual, we have Gfretw, Heybub and I that say you're wrong. No one here is agreeing with your convoluted nonsense. The above is an example of accrual accounting where the expenses of a business are correctly matched to the revenue they produce.
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On Sep 25, 11:32pm, " snipped-for-privacy@att.bizzzzzzzzzzzz"

Typical. As predicted, the argument is lost, so now it's on to the name calling.
You clearly don't understand even basic accounting concepts. Among your foolish ideas is apparently that it would reflect reality and be accurate to immediately expense all assets that are bought. That is NOT how accounting is done and it is not purely tax issue either. If you expensed assets immediately it would not give a true reflection of profits or the state of a business. Businesses would suddenly have wild swings in income and losses that would not represent the true condition of the business. If a business bought an expensive piece of equipment or built a new factory, suddenly they would go from having a nice profit the prior year, to showing a big loss this year. How would that look to investors, lenders, etc? Instead accounting 101 recognizes that the correct way is to DEPRECIATE the asset over it's useful life. Try taking accounting 101.
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On Wed, 26 Sep 2012 05:43:05 -0700 (PDT), " snipped-for-privacy@optonline.net"

There is also that recapture problem.
Even in the case of the truck. When you fully depreciate it in year one, you better drive it until the wheels fall off because when you sell it, the sale price will be taxable. (recaptured depreciation).
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On Sep 26, 11:40am, snipped-for-privacy@aol.com wrote:

Yes, which is another effect that is the OPPOSITE of what krw claims. He was claiming you pay tax today and get it back later? With accelerated depreciation on the truck, you get a big deduction immediately, perhaps for the cost of the whole thing, which saves you tax immediately and you then have either smaller or no deductions for truck depreciation in subsequent years. And as you point out if you later sell it for more than the depreciated value, you have a taxable gain on it.
I think his main problem is that he's confused with accrual accounting versus cash basis accounting.
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On Wed, 26 Sep 2012 09:46:04 -0700 (PDT), " snipped-for-privacy@optonline.net"

There you go lying again.

Fact.

No, it's a differed tax.

I know you're totally confused.
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On Sep 26, 8:17pm, " snipped-for-privacy@att.bizzzzzzzzzzzz"

No lie. You claimed over and over again how a business must pay the tax on the truck they bought this year and only get it back in subsequent years. That is indeed the opposite of how accelerated depreciation works.

See, you just did it again! And that is in fact the OPPOSITE of how it works.

Differed? You mean deferred? It's not that either. It works exactly as I described.

Another one of your obvious problems and issues is in evidence. You refuse to address your claims in a way that explains and illustrates. I've pointed this out to you before. I went through an example of accelerated depreciation on a truck, complete with numbers. Instead of addressing that, point by point, saying whether it is indeed correct or where you disagree, instead you ignore it and instead come back with 4 word replies and insults.
But you can't get away with it. Not here, not today. Here is the example again:
The accelerated depreciation deduction is taken when the truck is bought and consequently less tax money is sent in to the govt right then.
Let's say it's the second quarter of the year. I figure out all my revenue and expenses. One of those expenses would be normal depreciation on a $25,000 truck that I just bought. Let's say that depreciation was $5,000. After all the revenue and expenses, including that normal truck depreciation, I have a taxable profit of $100,000. Let's say I'm paying tax at a 30% rate. I would send the govt a check for $30,000 for the estimated tax payment for that quarter. That represents the best estimate of the amount of total tax I owe. Any difference is then resolved at the end of the year when the actual return is filed.
Now instead, let's look at what happens when the govt has an accelerated depreciation allowance for that truck. Now instead of writing the truck off over say 5 years, the allowance lets me write it off faster, let's say in just one year. So, instead of having a $5,000 depreciation on that truck in the the current year, I now have a $25000 deduction. Now my taxable business profit is not $100,000, but $20,000 LESS, or $80,000. Paying tax at a 30% rate, I send the govt a check for $24,000
Instead of paying $30,000 in tax, I just paid $24,000 That is how accelerated depreciation works. That $6,000 is kept by the business. It's not sent to the govt and refunded in later years.
That is how accelerated depreciation works. Gfretw told you the same thing. Now, if you disagree, instead of 4 word answers and insults, simply explain where you disagree with the above example.
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On Thu, 27 Sep 2012 05:48:14 -0700 (PDT), " snipped-for-privacy@optonline.net"

You really are stupid. That's *exactly* what happens. Se my previous post.

It certainly is.

You haven't a clue.

Evidence? You're an illiterate fool.

You simply can't read. I can't help you, there.

You screwed it up, too.

Idiot. I can't help it if you can't read.

Accelerated <> instantaneous.

See my example. You're wrong.

That's exactly what I'm saying, idiot! By *not* allowing the business to expense the investment that was clearly made out of profits, the government is taking too much tax, calling the investment income, and then refunding it in subsequent years.

No shit. You really *can't* read.

You're an idiot.
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On Sep 27, 9:42pm, " snipped-for-privacy@att.bizzzzzzzzzzzz"

Following that logic, no business would ever come into existence. Heybub already explained that and gave an example. Let's say I start a new business. I put up $100,000. Some friends put up $100,000. We borrow some money with an SBA loan. We use some of that money to buy equipment and a truck. For the first 2 years, we have no sales, no revenue. In year 3, we have revenue, but the business is running at a loss. There is no profit.
So, according to your screwy world, there was no investment. Go figure.

You think the term is "differed tax". You think there can be no investment without a profit. You think with accelerated depreciation a business pays tax today and then gets it back in future years. And I'm the one that is illiterate and clueless? LOL

The usual KRW troll tactic. Instead of explaining what exactly you claim is wrong, you just give a two word answer. The reason is obvious. It's because as usual, you've dug yourself quite the hole and now can't explain it away.

Nothing says the investment in a truck was made out of profits. That is something that YOU are assuming and it's just another example of a mistake made by someone with no accounting or business experience. For example, the business could have borrowed the entire cost of the truck. They could have had a new investor join in that just bought 10% of the business and they could have used that money to pay for the truck. They could have issued new stock. They could have sold 3 old trucks and used that money to buy the new truck.
You're really, really in that hole you've dug deep this time. Feel free to continue making an ass of yourself. Probably time for more name calling too.....
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That's an impressive business you've got. Profits before buying inventory, equipment, and signage?
No. Investments come from capital. Capital comes from startup funds and, later, profits. If you are lucky.
-- Doug
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Douglas Johnson wrote:

To be fair, a successful business could be one in which you bank the revenue before buying the raw materials. Many (most? all? some?) contractors operate that way.
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Well, I'm Canadian and I know there are lots of differences between your tax laws and ours. But, I'm sure it's fair to make the following broad generalizations that apply to both countries:
1. The vast majority of corporations in both Canada and the US have only one or two shareholders, which own all the shares of the company. That would include many farms, most commercial real estate, and lots of the small businesses you find on Main Street, Anytown, USA. There are lots of large corporations like Apple, NBC, Dow Chemical, etc. but for every one of those, there's a gazillion "one man shows".
2. Most of the small corporations that have a single director/shareholder capitalize their investments and expense their operating costs and thereby work out the company's net profit at the end of their fiscal year. Then they insert that amount where it asks for "employee wages" or "management bonuses", both of which are tax deductable to the corporations. So, now when you work out the net profit of the corporation, you conveniently come up with a big fat zero for profit. Then, the director and sole share holder of the corporation claim that income on their personal tax return for the year they actually received that pay from the company.
3. The reason it's done that way is that the word "Limited" or the abbreviation "Ltd." in a company's name, or even the abbreviation "Inc." in the company name is there to inform anyone and everyone that the liability of the shareholders of that company is LIMITED to the assets of the company.
So, let's say Joe Blow wants to start his own landscaping business. He can just pay $50 for a business license from the city or state and start doing work for people under the name Joe's Landscaping and Snow Removal Service. But, if Joe goes and uses his backhoe to dig a trench for a retaining wall in someone's back yard, and doesn't bother checking where the underground pipes and electrical cables are buried, and ends up pulling a gas line out of the ground which immediately catches fire and burns down much of the ghetto, then Joe is personally responsible for the damage caused and will lose everything he owns as a result. (Under bankruptcy laws, Joe gets to keep "basic necessities" like clothing, basic transporation (like his 91 Chevy), and his personal home (I think).)
But, let's say Joe goes to city hall and pays $400 to have "Blow Landscaping and Snow Removal Services Ltd." incorporated as a company. Then, if the same thing happens, Blow Landscaping and Snow Removal Services Ltd. is responsible for that damage and all of the assets of the company can be seized to pay for the damage caused. But, Joe's personal assets are out of reach. So, Joe gets to keep his Jaguar, his house in Beverly Hills, his cabin at Lake Tahoe, his yaucht, his LearJet, his collection of French wines, all of his rare art and every red cent in his bank accounts.
So, most people wanting to start a business or buy commercial property which they might not be able to pay for if the economy goes down the toilet are advised by their lawyers to create a corporation, and operate their business through that corporation to protect their personal wealth should they have a really bad day at work.
But, as long as nothing bad happens, Joe can do landscaping work and at the end of every year, Blow Landscaping figures out how much money it's made during the year, and pays it all to Joe as either an employee salary or as a management fee or bonus. That way the corporation submits a "nil" tax return telling the government that it made no profit and therefore owes no taxes, and Joe claims that income on his personal tax return.
Most times, that's how corporations are managed.
--
nestork


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Given that corporations cover a range that runs from Apple to that local landscaper, generalizations about "most" aren't very useful, are they? And regardless, even the example you gave of the local landscaping company, the same rules of accelerated depreciation for that truck they buy allows them to write if off faster, subjecting less to tax. It provides them with exactly the same incentive to buy a truck as it does Apple.
Here in the USA that landscaping corporation also has no need to pass the profits through to the owners with regard to taxation, not showing a profit, etc. The landscaping company would simply elect Subchapter S tax status, whereby the companies income is divided up for tax purposes among the owners and tax is paid by them on their personal returns, as if it were their own personal income, whether they receive the profits or the profits remain with the corporation.
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On 9/29/2012 3:22 AM, snipped-for-privacy@optonline.net wrote:

And, if it is actually taken as salary it's also subject to SSI tax (and remember as the single stockholder he's paying both "halves" directly for a total rate of 13.5%).
And, it doesn't really matter which place the income is taxed unless you're one who thinks it should be double-taxed as _both_ corporate _and_ personal income...

If one has any hope of anybody taking any chances of doing anything economic activity then on had better hope for such a situation. Who, in their right mind, will for a long term take such risks for themselves and particularly their families? Simply stupid to do so and tax codes universally recognize such...
...

Correct on both points...while Apple is a current popular whipping boy, they still paid some $2-3 b (w/a "B") in corporate taxes--that they use the tax rules as written to minimize their exposure is to their (and their stockholders') benefit and leads to their having increased chances of continuing to be able to support the kinds of innovative research and development that made them what they are...penalize that excessively and kill the goose that laid the golden egg is a likely outcome.

And, the US IRS is very observant on how one or low-numbered stockholders S-corps report dividends vis-a-vis wages and retained earnings and pressing the envelope is a very good way to generate an audit...
--
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dpb wrote:

Ve haf our vays!
The IRS bothered the hell out of my ex-boss for taking too large a salary from his private corporation - they wanted to tax the profits twice.
He set up five separate sole proprietorships to extract money from the corporation. For example, he personally owned all the computers and leased them to the company. The corporation sold the building we were in to him and he rented it back. And so on.
Screw you, IRS.
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