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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 14431
Experience:  15years with H & R Block. Divisional leader, Instructor
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Can I invest the incomes (before tax) into a property or I

This answer was rated:

Can I invest the incomes (before tax) into a property or I have to pay tax immediately?

We are a small fashion e-commerce firm. We have some income ~100,000 and want to buy a boutique shop w/ loans. But my accountant told me I need to pay tax first.

Can I invest the incomes (before tax) into a property or I have to invest with income after tax?

Thanks

Robin D. :

Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.

Customer:

Hi

Robin D. :

Hell

Robin D. :

Hello

Robin D. :

Your accountant is correct. Your profits are required to be shown for tax. If and when you invest in the additional property

Robin D. :

then

Robin D. :

you can show that as an expense

Robin D. :

Sorry about that start

Customer:

its alright

Robin D. :

I was typing my response to you and saw you said Hi

Customer:

so after investing, the income becomes an expense

Robin D. :

That is correct

Customer:

and we have new assets

Robin D. :

Correct

Customer:

and I need to pay tax for the asset instead of paying for the income?

Robin D. :

You would not pay tax on the asset, it would be an expense then

Robin D. :

If purchased it would be an asset to depreciate

Customer:

And I do not need to pay tax for the income that I already spent

Robin D. :

Yes, income is taxable

Robin D. :

Let me start with the basics

Robin D. :

You sale items that you purchased

Robin D. :

Your net (that would be total income less expenses) are then taxable

Robin D. :

You decide to expand

Robin D. :

The income you already earned is taxable but the new building would be an expense when you purchase it

Customer:

yes

Robin D. :

you would then get to depreciate that new building over years

Robin D. :

and against income from teh time of purchase

Robin D. :

but not going backward

Robin D. :

even on the income you had to get to make the purchase

Robin D. :

the new building will assist for future income

Robin D. :

is that clearer?

Robin D. :

It sounds like you have a good accountant

Customer:

got it

Robin D. :

Great

Customer:

Can I roll over my tax to the next year

Customer:

?

Robin D. :

Unfortunately no

Robin D. :

some business can do that (farmers and fisherman)

Customer:

ok got it :)

Customer:

thank you for your help

Customer:

Thankx

Robin D. :

You are most welcome.
Your positive rating is always thanks enough.

Robin D. and other Tax Specialists are ready to help you