Hilarious why some are upset over the high cost of alimited-production lens

On 9/21/2017 12:47 AM, RichA wrote:
1. The lens isn't going to be made in the thousands.
2. It's machined METAL, probably plated brass parts, unlike much of what they make today.

Having said that, I had a 58mm f/2.0 Biotar and because I like sharpness and contrast and round OOF highlights, it's not worth $995.00 to me.

https://www.dpreview.com/news/503684...lades#comments

The value of a lens varies from person to person. For the hobbyist, the
cost is an out-of-pocket expense, but for a pro, the cost of a lens is
less important than the use one gets from it since it's a business
write-off anyway (one of the many "loopholes" that keep businesses in
the USA from paying our "highest tax rate in the world" that some
politicians are selling to the ignorant).

--
best regards,

Neil

On 9/21/2017 6:29 PM, RichA wrote:
On Thursday, 21 September 2017 08:51:13 UTC-4, Neil wrote:
On 9/21/2017 12:47 AM, RichA wrote:
1. The lens isn't going to be made in the thousands.
2. It's machined METAL, probably plated brass parts, unlike much of what they make today.

Having said that, I had a 58mm f/2.0 Biotar and because I like sharpness and contrast and round OOF highlights, it's not worth $995.00 to me.

https://www.dpreview.com/news/503684...lades#comments

The value of a lens varies from person to person. For the hobbyist, the
cost is an out-of-pocket expense, but for a pro, the cost of a lens is
less important than the use one gets from it since it's a business
write-off anyway (one of the many "loopholes" that keep businesses in
the USA from paying our "highest tax rate in the world" that some
politicians are selling to the ignorant).

--
best regards,

Neil

In Canada, it works like this:
Business write-offs don't really mean "no-cost." It means you can deduct the cost of the item (30% per year or whatever) against income. So, if you spend $15,000 on some camera gear and your income is $50,000 that year you can deduct 30% that year (it might be 100%, depends) against your income. Around $4750 is deducted from your declared income and you pay income tax against the reduced income figure. That is your "write-off."
If you are lucky, at the end of it, you get back about 35% of total value of your gear, in tax reductions. Works with work vehicles, tools, etc.

In the USA, the loopholes change every couple of years, and almost
always with a change of party in control. Some years you can write off
the whole cost of capital goods items like camera gear (and much more
expensive items, such as machinery). During years where the amount one
can deduct exceeds the allowed amount (which can result in paying no
business income tax whatsoever), the balance can be written off during
the next year(s). Bottom line is that for pros, the cost of the gear is
pretty much irrelevant.

--
best regards,

Neil

On 9/21/2017 9:45 PM, Tony Cooper wrote:
On Thu, 21 Sep 2017 20:20:16 -0400, Neil
wrote:


In the USA, the loopholes change every couple of years, and almost
always with a change of party in control. Some years you can write off
the whole cost of capital goods items like camera gear (and much more
expensive items, such as machinery). During years where the amount one
can deduct exceeds the allowed amount (which can result in paying no
business income tax whatsoever), the balance can be written off during
the next year(s). Bottom line is that for pros, the cost of the gear is
pretty much irrelevant.

I'm not, and have never been, a professional photographer. However, I
owned a business for most of my working life.

First of all, the IRS does not let you write off $15,000 of purchases
of capital equipment. The codes of changed over the years, but the
maximum write-off is now $2,500 for a single item, and that used to be
$500. Over the max figure, and the item has to be depreciated over
the expected life of the item, so only a portion of the expense is a
business deduction that year.

I don't know how it's done with a camera kit expenditure. Maybe you
can break it up into components and write more off that way, though.

As to the cost being irrelevant, that's just silly. A photographer
who buys $15,000 of equipment has to come up with $15,000 to pay for
it or reduce his additional borrowing ability by $15,000. He doesn't
get a check back from government at tax time; his liability is simply
reduced.

I started my current business in 1974 (but had income as an independent
producer for several years prior to that). I understand your
generalizations about the write-offs, particularly with regard to
depreciation. At times I had large capital expenses (well beyond the
cost of photographic equipment) and what one could write off was based
on the price divided by the useful life of the equipment rather than a
fixed amount (for cash purchases, anyway). By the end of life the total
purchase cost was recouped in tax deductions. However, some years' tax
code allowed the entire amount being written off in order to encourage
capital investments, which is what I referred to, above.

I also understand your statement that one has to come up with the money
to make the capital investment to begin with. But, that's just business,
and if the work is there, it should not be an issue.

--
best regards,

Neil

On 9/21/2017 9:45 PM, Tony Cooper wrote:
On Thu, 21 Sep 2017 20:20:16 -0400, Neil
wrote:


In the USA, the loopholes change every couple of years, and almost
always with a change of party in control. Some years you can write off
the whole cost of capital goods items like camera gear (and much more
expensive items, such as machinery). During years where the amount one
can deduct exceeds the allowed amount (which can result in paying no
business income tax whatsoever), the balance can be written off during
the next year(s). Bottom line is that for pros, the cost of the gear is
pretty much irrelevant.

I'm not, and have never been, a professional photographer. However, I
owned a business for most of my working life.

First of all, the IRS does not let you write off $15,000 of purchases
of capital equipment. The codes of changed over the years, but the
maximum write-off is now $2,500 for a single item, and that used to be
$500. Over the max figure, and the item has to be depreciated over
the expected life of the item, so only a portion of the expense is a
business deduction that year.

I don't know how it's done with a camera kit expenditure. Maybe you
can break it up into components and write more off that way, though.

As to the cost being irrelevant, that's just silly. A photographer
who buys $15,000 of equipment has to come up with $15,000 to pay for
it or reduce his additional borrowing ability by $15,000. He doesn't
get a check back from government at tax time; his liability is simply
reduced.




Check Sec. 179. the limit is now $500,000 of qualifying property. But it
must be a real purchase, at the going realistic price.

--
PeterN

On 9/21/2017 10:33 PM, Neil wrote:

On 9/21/2017 9:45 PM, Tony Cooper wrote:
On Thu, 21 Sep 2017 20:20:16 -0400, Neil
wrote:


In the USA, the loopholes change every couple of years, and almost
always with a change of party in control. Some years you can write off
the whole cost of capital goods items like camera gear (and much more
expensive items, such as machinery). During years where the amount one
can deduct exceeds the allowed amount (which can result in paying no
business income tax whatsoever), the balance can be written off during
the next year(s). Bottom line is that for pros, the cost of the gear is
pretty much irrelevant.

I'm not, and have never been, a professional photographer.Â* However, I
owned a business for most of my working life.

First of all, the IRS does not let you write off $15,000 of purchases
of capital equipment.Â* The codes of changed over the years, but the
maximum write-off is now $2,500 for a single item, and that used to be
$500.Â* Over the max figure, and the item has to be depreciated over
the expected life of the item, so only a portion of the expense is a
business deduction that year.

I don't know how it's done with a camera kit expenditure.Â* Maybe you
can break it up into components and write more off that way, though.

As to the cost being irrelevant, that's just silly.Â* A photographer
who buys $15,000 of equipment has to come up with $15,000 to pay for
it or reduce his additional borrowing ability by $15,000.Â*Â* He doesn't
get a check back from government at tax time; his liability is simply
reduced.

I started my current business in 1974 (but had income as an independent
producer for several years prior to that). I understand your
generalizations about the write-offs, particularly with regard to
depreciation. At times I had large capital expenses (well beyond the
cost of photographic equipment) and what one could write off was based
on the price divided by the useful life of the equipment rather than a
fixed amount (for cash purchases, anyway). By the end of life the total
purchase cost was recouped in tax deductions. However, some years' tax
code allowed the entire amount being written off in order to encourage
capital investments, which is what I referred to, above.

I also understand your statement that one has to come up with the money
to make the capital investment to begin with. But, that's just business,
and if the work is there, it should not be an issue.


If the work is there, price is still an important issue, though taxes
are a consideration. Any different approach would be a factor in
considering whether a real business is being run. If an individual is
doing nothing but event photography tries do deduct the cost of an
expedition to Antarctic, to photograph penguins, he would have problems
in proving the trip is a legitimate business expense. I am not going to
further discuss what if situations.

--
PeterN

On 9/21/2017 8:20 PM, Neil wrote:
On 9/21/2017 6:29 PM, RichA wrote:
On Thursday, 21 September 2017 08:51:13 UTC-4, NeilÂ* wrote:
On 9/21/2017 12:47 AM, RichA wrote:
1. The lens isn't going to be made in the thousands.
2. It's machined METAL, probably plated brass parts, unlike much of
what they make today.

Having said that, I had a 58mm f/2.0 Biotar and because I like
sharpness and contrast and round OOF highlights, it's not worth
$995.00 to me.

https://www.dpreview.com/news/503684...lades#comments


The value of a lens varies from person to person. For the hobbyist, the
cost is an out-of-pocket expense, but for a pro, the cost of a lens is
less important than the use one gets from it since it's a business
write-off anyway (one of the many "loopholes" that keep businesses in
the USA from paying our "highest tax rate in the world" that some
politicians are selling to the ignorant).

--
best regards,

Neil

In Canada, it works like this:
Business write-offs don't really mean "no-cost."Â* It means you can
deduct the cost of the item (30% per year or whatever) against
income.Â* So, if you spend $15,000 on some camera gear and your income
is $50,000 that year you can deduct 30% that year (it might be 100%,
depends) against your income. Around $4750 is deducted from your
declared income and you pay income tax against the reduced income
figure.Â* That is your "write-off."
If you are lucky, at the end of it, you get back about 35% of total
value of your gear, in tax reductions.Â* Works with work vehicles,
tools, etc.

In the USA, the loopholes change every couple of years, and almost
always with a change of party in control. Some years you can write off
the whole cost of capital goods items like camera gear (and much more
expensive items, such as machinery). During years where the amount one
can deduct exceeds the allowed amount (which can result in paying no
business income tax whatsoever), the balance can be written off during
the next year(s). Bottom line is that for pros, the cost of the gear is
pretty much irrelevant.


Completely wrong. While we use the Tax Code as an instrument of economic
policy, any business expense must meet the test of being ordinary,
necessary and reasonable. For what that means I commend you to the Tax
Code, the regulations, and the cases decided thereunder. You can Google
and do your own research.


--
PeterN

On 9/22/2017 1:40 AM, PeterN wrote:
On 9/21/2017 8:20 PM, Neil wrote:
On 9/21/2017 6:29 PM, RichA wrote:
On Thursday, 21 September 2017 08:51:13 UTC-4, NeilÂ* wrote:
On 9/21/2017 12:47 AM, RichA wrote:
1. The lens isn't going to be made in the thousands.
2. It's machined METAL, probably plated brass parts, unlike much of
what they make today.

Having said that, I had a 58mm f/2.0 Biotar and because I like
sharpness and contrast and round OOF highlights, it's not worth
$995.00 to me.

https://www.dpreview.com/news/503684...lades#comments


The value of a lens varies from person to person. For the hobbyist, the
cost is an out-of-pocket expense, but for a pro, the cost of a lens is
less important than the use one gets from it since it's a business
write-off anyway (one of the many "loopholes" that keep businesses in
the USA from paying our "highest tax rate in the world" that some
politicians are selling to the ignorant).

--
best regards,

Neil

In Canada, it works like this:
Business write-offs don't really mean "no-cost."Â* It means you can
deduct the cost of the item (30% per year or whatever) against
income.Â* So, if you spend $15,000 on some camera gear and your income
is $50,000 that year you can deduct 30% that year (it might be 100%,
depends) against your income. Around $4750 is deducted from your
declared income and you pay income tax against the reduced income
figure.Â* That is your "write-off."
If you are lucky, at the end of it, you get back about 35% of total
value of your gear, in tax reductions.Â* Works with work vehicles,
tools, etc.

In the USA, the loopholes change every couple of years, and almost
always with a change of party in control. Some years you can write off
the whole cost of capital goods items like camera gear (and much more
expensive items, such as machinery). During years where the amount one
can deduct exceeds the allowed amount (which can result in paying no
business income tax whatsoever), the balance can be written off during
the next year(s). Bottom line is that for pros, the cost of the gear
is pretty much irrelevant.


Completely wrong. While we use the Tax Code as an instrument of economic
policy, any business expense must meet the test of being ordinary,
necessary and reasonable. For what that means I commend you to the Tax
Code, the regulations, and the cases decided thereunder. You can Google
and do your own research.


OF COURSE the business expenses, including capital purchases, must be
legitimate. I'm not discussing anything other situation. So, I guess
it's fortunate for me that the IRS disagrees with your opinion that I'm
"completely wrong", as most audits have gone in my favor and the few
others were minor omissions rather than erroneous applications of the
tax code.

--
best regards,

Neil

On 2017-09-21 08:51, Neil wrote:

The value of a lens varies from person to person. For the hobbyist, the
cost is an out-of-pocket expense, but for a pro, the cost of a lens is
less important than the use one gets from it since it's a business
write-off anyway (one of the many "loopholes" that keep businesses in
the USA from paying our "highest tax rate in the world" that some
politicians are selling to the ignorant).

Depreciating capital purchases or expensing costs is not a loophole[1]
at all. It reflects the cost of doing business. Costs reduce your
income tax accordingly.

Costs can either be expensed or depreciated depending on the tax code.
Usually "depreciated" when the life value of the good is more than 2
years; otherwise expensed in the year of purchase.

I'd expect a photographer could probably expense lenses and cameras in
Canada but one's accountant will advise. It wouldn't make much
difference to a "going concern" as he'd be retiring equipment and
replacing at a roughly equal rate over the years - less accounting
hassle, Blad.

[1] Loopholes are special cases that apply narrowly such as California's
"yacht loophole" (may be closed now). Buy the boat "offshore"
(transaction takes place over 3 miles from shore), dock it in Mexico
(but you have to use it), then bring it home after 90 days. No sales
tax. That's a loophole and tax codes are rife with them. Takes
political death wish to attack a lot of them in PAC-mad America.

On 9/22/2017 12:44 PM, Alan Browne wrote:
On 2017-09-21 08:51, Neil wrote:

The value of a lens varies from person to person. For the hobbyist,
the cost is an out-of-pocket expense, but for a pro, the cost of a
lens is less important than the use one gets from it since it's a
business write-off anyway (one of the many "loopholes" that keep
businesses in the USA from paying our "highest tax rate in the world"
that some politicians are selling to the ignorant).

Depreciating capital purchases or expensing costs is not a loophole[1]
at all.Â* It reflects the cost of doing business.Â* Costs reduce your
income tax accordingly.

I can agree with your terminology, and it appears we agree about the
impact of loopholes on our real tax rate. My point was that countries
with a flat tax rate or lack such loopholes aren't really comparable to
our situation.

--
best regards,

Neil

On 9/22/2017 1:36 AM, PeterN wrote:
On 9/21/2017 10:33 PM, Neil wrote:

On 9/21/2017 9:45 PM, Tony Cooper wrote:
On Thu, 21 Sep 2017 20:20:16 -0400, Neil
wrote:


In the USA, the loopholes change every couple of years, and almost
always with a change of party in control. Some years you can write off
the whole cost of capital goods items like camera gear (and much more
expensive items, such as machinery). During years where the amount one
can deduct exceeds the allowed amount (which can result in paying no
business income tax whatsoever), the balance can be written off during
the next year(s). Bottom line is that for pros, the cost of the gear is
pretty much irrelevant.

I'm not, and have never been, a professional photographer.Â* However, I
owned a business for most of my working life.

First of all, the IRS does not let you write off $15,000 of purchases
of capital equipment.Â* The codes of changed over the years, but the
maximum write-off is now $2,500 for a single item, and that used to be
$500.Â* Over the max figure, and the item has to be depreciated over
the expected life of the item, so only a portion of the expense is a
business deduction that year.

I don't know how it's done with a camera kit expenditure.Â* Maybe you
can break it up into components and write more off that way, though.

As to the cost being irrelevant, that's just silly.Â* A photographer
who buys $15,000 of equipment has to come up with $15,000 to pay for
it or reduce his additional borrowing ability by $15,000.Â*Â* He doesn't
get a check back from government at tax time; his liability is simply
reduced.

I started my current business in 1974 (but had income as an
independent producer for several years prior to that). I understand
your generalizations about the write-offs, particularly with regard to
depreciation. At times I had large capital expenses (well beyond the
cost of photographic equipment) and what one could write off was based
on the price divided by the useful life of the equipment rather than a
fixed amount (for cash purchases, anyway). By the end of life the
total purchase cost was recouped in tax deductions. However, some
years' tax code allowed the entire amount being written off in order
to encourage capital investments, which is what I referred to, above.

I also understand your statement that one has to come up with the
money to make the capital investment to begin with. But, that's just
business, and if the work is there, it should not be an issue.


If the work is there, price is still an important issue, though taxes
are a consideration. Any different approach would be a factor in
considering whether a real business is being run. If an individual is
doing nothing but event photography tries do deduct the cost of an
expedition to Antarctic, to photograph penguins, he would have problems
in proving the trip is a legitimate business expense. I am not going to
further discuss what if situations.

I have been talking about first-hand experience of over 50 years in
business, not theoretical "what if" scenarios. FWIW, mine is consistent
with the experiences of many friends and associates who are business
owners. All of my equipment, not just photographic items, have been paid
for by the work I did with them, and their entire cost was a legitimate
business expense, ergo deducted from my business' net income.

--
best regards,

Neil