Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

I have a question about using a creative strategy to maximize

Customer Question
my section 179 deduction. I...
I have a question about using a creative strategy to maximize my section 179 deduction. I currently have an S-Corporation that provide audio-visual equipment rentals for business meetings and events. Year to date, I have spent approximately $200,000 on equipment that would be eligible for Sec 179 deduction. I would like to use the deduction to shelter another $600,000 in taxes. Here is how I am proposing to do it.

I would like to purchase another $300,000 in equipment for use for our core business. There is also a supplier of our company that can use a piece of equipment that carries a $300,000 purchase price.

I would like to establish a new C-Corporation (this year) that would purchase and lease out the $300K in equipment to my S-corporation, and the $300k piece of equipment for the supplier. Since this new C-corp would have no income I couldn't write off the deduction this year, but I could roll over the deduction to next year when I assumedly will have the income to write it off.

I would like to know if this plan sounds feasible, and if there are any limitations to it that I'm not forseeing. I will absolutely pay a premium for a thoughtful knowledgable answer.

Thanks!
Submitted: 7 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 18 hours by:
11/1/2010
Tax Professional: MequonCPA, Certified Public Accountant (CPA) replied 7 years ago
MequonCPA
MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2,342
Experience: CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
Verified
Questions:

1. C corp purchases $300K in equipment and leases to S Corp. Is the lease an operating lease or a lease purchase?

2. C corp purchases an additional $300K in equipment to lease to a third party, is this correct.

What will happen to the equipment at the termination of the leases.

Ask Your Own Tax Question
Ask Wallstreet Esq. Your Own Question
Wallstreet Esq.
Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 586
586 Satisfied Customers
Experience: 10 years experience

Wallstreet Esq. is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
Can my son write off mortgage if house is in my name.He does
can my son write off mortgage if house is in my name.He does reside in the home. … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
What is the statue of limitations for restaurant sales tax
what is the statue of limitations for restaurant sales tax delinquency in Virginia and can you discharge it in bankruptcy?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,490 satisfied customers
Dose mean can not deduct state income taxes only or dose it
dose mean can not deduct state income taxes only or dose it includes property taxes too … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Can you write off mortgage interest on a vacation home the
can you write off mortgage interest on a vacation home the home price 54000.00 … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
You may recall that tax deductions are only deductible by
You may recall that tax deductions are only deductible by the legislative grace of Congress. After this lesson, you might have realized that Congress was pretty generous with the types of business exp… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,490 satisfied customers
Can I write off mileage from my tractor on a schedule F? And
Can I write off mileage from my tractor on a schedule F? And is it possible to claim 179 deduction on it?… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
K1 and Net Rental Income. I hold limited memberships into
K1 and Net Rental Income.I hold limited memberships into several LLCs that own / operate commercial real estate investments. One of my these LLCs issued a K1 (Form 1065) that shows over $65k in Box 2 … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Is there a statute of limitation for sales tax in ohio?
Is there a statute of limitation for sales tax in ohio? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,490 satisfied customers
Trying to understand if I can write off the purchase of a
Trying to understand if I can write off the purchase of a computer … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,490 satisfied customers
Can I write off (I would think Schedule C) my $2400 tax prep
Can I write off (I would think Schedule C) my $2400 tax prep fee. I am a "real estate professional" "active participation" and have about 30 rental properties, I own as a sole proprietor w/o dba or co… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,230 satisfied customers
My question is about writing off travel expenses.. I am a
My question is about writing off travel expenses.. I am a self employed internet marketer, and am wanting to start a new project (building a video sales page) to do this I need to shoot pictures and v… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Tax question regarding mba write-off as educational
tax question regarding mba write-off as educational expenses. Im an engineer looking to move to management track within current company. Company is reimbursing me for my tuition, but adding it onto my… read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
Second opinion] tax question regarding mba write-off as
Second opinion] tax question regarding mba write-off as educational expenses. Im an engineer looking to move to management track within current company. Company is reimbursing me for my tuition, but a… read more
Matthew Breecher
Matthew Breecher
President
MBA (Graduate Legal Studies)
285 satisfied customers
Tax Rules: If I come to a (defendable) decision to write off
Tax Rules: If I come to a (defendable) decision to write off an amount I loaned a company, what kinds of income can that shield? What are the limitations?Also, I was told by someone that I have to wri… read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
Can you write off sports events for work, if your in outside
Can you write off sports events for work, if your in outside sales? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I have a network marketing business. Can I write off a
Hello. I have a network marketing business. Can I write off a business expense for monthly auto-delivery program a member has to be on to qualify for all commission bonuses … read more
Rick Martin
Rick Martin
MBA
92 satisfied customers
I was an independent contractor and was able to write off
I was an independent contractor and was able to write off all of my expenses. I retired last year and officiate weddings. But being retired I am not able to keep these write offs. If I start a S Corp … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Are you familuar with 4797 form? is it possible to write off
is it possible to write off a loss on a real estate property from 2011? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x