[net.taxes] home computer write-off

garry (04/07/83)

i purchased a home computer last year with the express purpose
of writing and selling software for the home computer market.
i'd like to know how to go about using this as a deduction on 
my tax return this time around.  it is my impression that, as business
equipment, this must be depreciated rather than flat-out deducted,
but i am not sure.  does anybody out there know what i ought to do
about this??  true to form, i've waited til the last minute to do my
return, so i'd appreciate help ASAP.  thanx in advance...

			garry hodgson
			floyd!garry
			BTL WH 3c 329b
			x 3570

kgsu (04/07/83)

There many options.  The one I would recommend is to take
the %6 investment tax credit (new this year) and depreciate it over three
years using the new ACRS figures.

If you're lazy and it cost under $5000 you can expense the whole thing
in the year you bought the equipment.  But you lose the 6% tax credit
if you do that.  (You pay for your laziness.)

For those of you in business for yourselves, I'd highly recommend 
a book "Business TAX Deduction Master Guide" by W. Murray Bradford
and Ronald V. Reed.  Cost $10.95.

				Ken Greer
				ucbvax!hplabs!kg

lab (04/07/83)

I am (finally) considering getting a home computer, and am
interested in how it could be LEGALLY written off (depreciated)
without necessarily having to start a business requiring a
business license. Does a personal computer qualify as a "small
tool"? The possibility of a write-off would make a HUGE difference
in the amount of compute and database power I would get.

Remember, keep it LEGAL. Thanks in advance.
				Larry Bickford
				decvax!decwrl!qubix!lab

smith@umn-cs.UUCP (06/06/83)

#R:floyd:-141000:umn-cs:10500007:000:675
umn-cs!smith    Apr 13 10:56:00 1983

  If you're a professional (i.e. engineering type) and you in fact use your
home machine for working, then you can probably deduct the depreciation as an
employee business expense on form 2106.  This year the depreciation form
has a spot for writing off the whole amount instead of depreciating it, if
it's under $5000.  I deducted my machine about two years ago and I haven't
heard any complaints.  I documented it on the return as "calculating equipment
used for professional purposes" since it is known that the IRS considers
expensive pocket calculators to be valid 'professional tools'.

  Note that this doesn't do you much good if you don't itemize deductions.

Rick.