Avid Pro Audio Community

Avid Pro Audio Community

How to Join & Post  •  Community Terms of Use  •  Help Us Help You

Knowledge Base Search  •  Community Search  •  Learn & Support


Avid Home Page

Go Back   Avid Pro Audio Community > Legacy Products > 003, Mbox 2, Digi 002, original Mbox, Digi 001 (Win)

Reply
 
Thread Tools Search this Thread Display Modes
  #1  
Old 09-15-2002, 10:19 PM
VincePro VincePro is offline
Member
 
Join Date: Apr 2002
Location: Lincoln Park,Chicago
Posts: 135
Default Depreciation on music equipment for tax purposes

According to the IRS, over how many years do I have to depreciate my musical equipment? Is it two years? Any info would be appreciated, thanks.

Vince
Reply With Quote
  #2  
Old 09-15-2002, 10:52 PM
tptman tptman is offline
Member
 
Join Date: Feb 2002
Location: Seattle
Posts: 191
Default Re: Depreciation on music equipment for tax purposes

I've always opted for the "one time" deduction. That is allowed in certain cases, and my Turbo Tax has always allowed it (based on my descriptions and the listed restrictions).

But if I'm wrong, and you work for the IRS, my name is Dave Froker, I live in Daly City, CA, my social security number is... [img]images/icons/grin.gif[/img]
Reply With Quote
  #3  
Old 09-16-2002, 06:58 AM
JPS JPS is offline
Member
 
Join Date: Feb 2001
Location: Ohio
Posts: 924
Default Re: Depreciation on music equipment for tax purposes

It is my understanding, as explained by my accountant, that the IRS tax code allows ANY business to EXPENSE upto $20,000 per year. To EXPENSE an item means that the total value of that item is deducted from taxable revenues of the current year. So this is the one-time deduction.

The other option is depreciation, where the value of the equipent is deducted from taxable revenues over the "life of the equipment." IRS has many rules to determine if a piece of equipment qualifies for 3,5,9 years deduction schedules. Usually, shorter is better. Certain items do not qualify for expensing, including vehicles and real estate purchases; they must use depreciation.

EXPENSING is a real windfall for small business owners. I use expensing for computers and a lot of electronic equipment, but I am not in the audio business. Howerer, audio people should be able to expense computers, samplers, software, and PT HD systems, Digi 002s, or what not, upto $20,000 per year. After your $20,000 expense credit is used, then you must use the more common depreciation method, or expense the remaining portion in the following year.
__________________
John-Q6600,GA-EP35-DS3P, Zigmatec S1283: 235 D-Verbs @ 2.4 ghz
Reply With Quote
  #4  
Old 09-16-2002, 07:09 AM
da BaSsTaRd! da BaSsTaRd! is offline
Member
 
Join Date: Jan 2001
Location: NYC
Posts: 4,933
Default Re: Depreciation on music equipment for tax purposes

working musicians can deduct 100% of their equipment purchases on schedule C up to a limit of $??,000 (its high - something like $25,000).

i doubt that technically this would apply to recording studios, but you could claim that you're a label. a label can be considered the same as a working musician (label + musician working toward a common goal makes them extremely similar). in that case, you can use the deduction. if you get audited, you need to show a) what percentage of your income came from label vs. regular customers and b) you should show some revenue for your label (as opposed to income - you can have revenue and still show a loss).
__________________
i love my apple iPhone!
Reply With Quote
  #5  
Old 09-16-2002, 09:23 AM
JPS JPS is offline
Member
 
Join Date: Feb 2001
Location: Ohio
Posts: 924
Default Re: Depreciation on music equipment for tax purposes

Well, DaBaSsTaRd, my numbers were just a bit off. Any business, either Sole Propritor, Corporation or Partnership, as well as a “Self-Employed” person can claim the Expense deduction as follows:
Tax Year 2000 $20,000
Tear Year 2001-2 $24,000
Tax Year 2003 $25,000

These numbers have been changing upward almost every year for the past 10 years. Schedule C is the tax form for Self Employment, which would include working musicians. A Label would normally be organized as a Corporation, a Sole Proprietor, or a Partnership and also would qualify for the deduction. However, the self-employed person or the business must have revenues equal to or greater than the expense deduction, which is the main issue.

So even a working musician who files a Schedule C Self-Employment form can expense up to $24,000 in equipment per year and every year, provided he has $24,000 in taxable revenues every year. This is just general tax information, for specific tax advice, you best visit an accountant.
__________________
John-Q6600,GA-EP35-DS3P, Zigmatec S1283: 235 D-Verbs @ 2.4 ghz
Reply With Quote
  #6  
Old 09-17-2002, 12:54 AM
VincePro VincePro is offline
Member
 
Join Date: Apr 2002
Location: Lincoln Park,Chicago
Posts: 135
Default Re: Depreciation on music equipment for tax purposes

JPS,

So what deduction schedule do most samplers, synths, etc.. fall under?? Thanks!

Vince
Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
HD/Native Depreciation Percentage AlbatrossAudio Pro Tools HDX & HD Native Systems (Mac) 4 05-28-2011 03:22 PM
Is it alright to use the loops that come with m powered for commercial purposes ? nutrinoland General Discussion 2 05-25-2011 03:36 PM
best audio interface for 2 purposes dj_grimmace Pro Tools M-Powered (Mac) 0 01-16-2006 10:45 AM
DJ's using Pro Tools for DJ purposes. (Promo CD's) *DELETED* Shams 003, Mbox 2, Digi 002, original Mbox, Digi 001 (Win) 5 12-01-2005 02:21 PM
copying files for optimization purposes AverageJoe 003, Mbox 2, Digi 002, original Mbox, Digi 001 (Mac) 2 10-09-2002 12:34 AM


All times are GMT -7. The time now is 04:18 PM.


Powered by: vBulletin, Copyright ©2000 - 2008, Jelsoft Enterprises Limited. Forum Hosted By: URLJet.com