Depreciation???

Discussion in 'Off-Topic' started by salmanshaheen_88, Jun 19, 2010.

  1. salmanshaheen_88

    Thread Starter Active Member

    Mar 5, 2009
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    1
    how depreciation effects the tariff???
     
  2. bertus

    Administrator

    Apr 5, 2008
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  3. loosewire

    AAC Fanatic!

    Apr 25, 2008
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    The longer you have It ,the valve go's down,
    unless It turn out to be a keeper like a good
    old car. Some old cars get more valuable.
    If you buy business equipment you get to adjust
    the value down each year.If you ship a new car and
    take the motor out and put It in the trunk. Some
    times you pay less tariff. Girl friends don't apply.
    Loosewire.Wierd facts for more Information.
     
  4. jpanhalt

    AAC Fanatic!

    Jan 18, 2008
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    Depreciation is often a double-edged sword. As a business (not generally an individual in the USA), you depreciate something that is capital equipment or other depreciable property defined in our code. That loss on parer counts against income and can (but not always) reduce taxes. If you later sell the item for more that its depreciated value, then you have to pay tax on the "recaptured" value. That is taxed as ordinary income, and since rates usually go up, not down, you easily can end up paying more tax than what you avoided paying in the first place. Inflation, of course,works in your favor, because the newer dollars are worth less then the older dollars.

    All in all, it is complicated and you need to analyze carefully your situation before using depreciation. If in fact, you are going to use equipment until it is junk, then depreciation can work for you. If you anticipate that you might end up in a recapture scenario, there are lots of factors to consider, not the least of which is that you may open your taxes for a long-forgotten year to re-analysis by the IRS (USA).

    As for the effect on tariff, I suspect every country has it unique rules governing the cost/price basis on which such tariffs are based.

    John
     
  5. loosewire

    AAC Fanatic!

    Apr 25, 2008
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    I have seen a lot of motors removed to reduce tariff.
    It must save a lot of tariff to remove motors and put
    them In trunk of the car. The containers have changed
    the systems.