Posted by Rob Perelli-Minetti on February 10, 2000 at 14:56:43:
In Reply to: Re: Re: Taxes, Please help me!!!! posted by ed on February 10, 2000 at 12:01:16:
There is a downside to depreciating a horn is that you will have to pay tax on the gain when you sell it. Example: I buy a tuba for $6,000 and depreciate it over 5 years (assuming it is 5 year property) so that my basis is $0. I sell the tuba for $3,000 in year six. For year 6, I have income in the amount of the sale price [since the sale price, $3,000, minus my basis 0 = $3000], on which I must pay income tax.