I know there are a lot of business owners on here, and I have a questions that maybe someone can answer.
The primary application for my glowforge (once it arrives) will be to create custom branded objects for our businesses. That said, I paid for it in a different calendar year then the businesses were incorporated. Can I still deduct it? Or, would I basically need to sell it to my business (myself) in order to do that and have it registered as a purchase in this calendar year?
I know this is maybe outside of the scope but I figure someone here has had this same issue.
I am not an accountant, but I believe the rule is that if an asset, such as a computer or the GF is 100% for a business, you can deduct it in the year it is placed in service. EDIT: If I recall, there is an additional form/rule that has to be used in this case. This would not be something you could do with just a 1040.
If the asset is split-use–i.e. you use it for personal and business purposes–then you will need to depreciate it over the time you expect it to be in service. So, if you spent $5,000 on your GF, and you expect it to last for 5 years, you can deduct $1,000 each year it is in service.
Thanks. Yeah, I wrote my accountant before posting but I’m impatient and also a bit curious as to what others’ experiences are. I have not made any split-use purchases yet, so, that is good to know.
Equipment depreciation is changing dramatically in 2018, with many items being fully deductible in the year you buy them. So talk to your accountant. If there’s a sale from you to your business, you may want to do it in '18.