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Writing off gear?



 
 
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  #1  
Old May 22nd 06, 07:00 PM posted to rec.photo.misc,rec.photo.digital,rec.photo.equipment.35mm,rec.photo.technique.art
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Default Writing off gear?

In article , Carlo Coggi
writes
I am an advanced amateur photographer and will be taking an 'extreme
adventure' vacation this summer. A friend of a friend is editor of a
well-known travel magazine who heard about my somewhat unique vacation
and said that the magazine would be interested in seeing a spec
article/photos about the trip.

Business/Tax Question:

Two months ago I sold my Canon 10D and bought a 30D and some related
camera gear. If my photos and text are accepted for publication, can I
then form a sole proprietorship or corporation and *retroactively*
write-off the cost of my gear and trip?


The points made by Thomas are good. However, the chance of you making
enough to make it worthwhile to pay for professional advice are remote,
so you may find the following helpful. You may find the available
expertise is greater than you think, but you will have to use your own
judgement as to the credentials of the respondent*.

In any question involving the application of any branch of law, it is
essential to state the jurisdiction in which you reside. Tax law will be
very different in the various countries of the world.

In the UK, expenses may only be deducted in computing the profits of a
business if they are incurred "wholly and exclusively" for the purposes
of the trade. Under some circumstances it may be acceptable to apportion
the expenses if they are partly for trade use and partly private. I
would guess that the rules are likely to be similar in many
jurisdictions.

The way you have expressed the question - "will be taking an extreme
adventure vacation" - rather makes life difficult for you; you had
already decided to take the holiday for private enjoyment, and the
opportunity to make a little on the side arose later.

The system of giving credit for equipment will probably be a little
different. In the UK, there is a system called capital allowances which
does allow partial allowances for assets used for both trade and
personal purposes. In the US, it is called tax depreciation, but I do
not know what the personal use rules are.

Keep a careful record of the expenses, and if the tax authorities of
your country are helpful it may be worth discussing the position with
them (it should at least be free). It may be you can make a case for
sufficient expenses to be deducted, or capital allowances/tax
depreciation to be given to at least cover the receipts.

*In my case, 20 years as a tax professional in the UK. Though I have not
practised as such for a few years, the basic principles in this area do
not change much. Nevertheless, I only offer it as general guidance. Tell
us which country you live in and you may get some more specific advice.

David
--
David Littlewood
  #2  
Old May 22nd 06, 07:20 PM posted to rec.photo.misc,rec.photo.digital,rec.photo.equipment.35mm,rec.photo.technique.art
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Default Writing off gear?

In rec.photo.equipment.35mm David Littlewood wrote:

*In my case, 20 years as a tax professional in the UK. Though I have not
practised as such for a few years, the basic principles in this area do
not change much. Nevertheless, I only offer it as general guidance. Tell
us which country you live in and you may get some more specific advice.


He posts from Road Runner in New York City or the vacinity ... so your answer
is the US I believe. Either way, if you bought the camera for personal use
and plans to use it for personal uses after his extreme adventure, then
basically a very very small portion of the camera would apply for business
use. In general, I advise not trying to dodge the IRS for a couple of extra
bucks. What is the most you can save on a 30D and accessories? At a 20% tax
rate you might save $400? Is that worth forming a company and risking the
wrath of the IRS because of its pseudo legitimate nature (if the system was
used 5% of the time for business in practice, then that is only $20!).

--
Thomas T. Veldhouse
Key Fingerprint: 2DB9 813F F510 82C2 E1AE 34D0 D69D 1EDC D5EC AED1

  #3  
Old May 22nd 06, 07:48 PM posted to rec.photo.misc,rec.photo.digital,rec.photo.equipment.35mm,rec.photo.technique.art
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Default Writing off gear?

In article , Thomas T. Veldhouse
writes
In rec.photo.equipment.35mm David Littlewood wrote:

*In my case, 20 years as a tax professional in the UK. Though I have not
practised as such for a few years, the basic principles in this area do
not change much. Nevertheless, I only offer it as general guidance. Tell
us which country you live in and you may get some more specific advice.


He posts from Road Runner in New York City or the vacinity ... so your answer
is the US I believe.


Ah yes - it is usually US resident posters who don't think it necessary
to say where they live!

Either way, if you bought the camera for personal use
and plans to use it for personal uses after his extreme adventure, then
basically a very very small portion of the camera would apply for business
use. In general, I advise not trying to dodge the IRS for a couple of extra
bucks. What is the most you can save on a 30D and accessories? At a 20% tax
rate you might save $400? Is that worth forming a company and risking the
wrath of the IRS because of its pseudo legitimate nature (if the system was
used 5% of the time for business in practice, then that is only $20!).

Which is why I suggested discussing it with them. However, from what I
recall being told by my one-time US opposite numbers, the IRS is not
exactly a user-friendly organisation.

I certainly don't think it would be advisable to form a company, which
would be much more complex and expensive. Sorry, should have made that
clear.

David
--
David Littlewood
 




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