I Started a Home Repair Business. Can I Deduct My Personal Tools and Pickup
Truck That I Am Now Using For Business?
Yes. You can claim a depreciation deduction for
personal assets that are converted to business use. Your basis for depreciation (the amount that
can be written off over its useful life) is the lower of either the equipment’s
fair market value when the asset is converted into a business asset or its
Example: If you purchased your truck for $30,000 and
it is worth $20,000 when you start using it for business, your basis for
depreciation is the lower amount of $20,000.
to check with your tax advisor. Your
deduction for vehicles may be limited by the “luxury car” rules.
When I Sell My Home, How Much Should I
Reinvest in a New Home
to Avoid Paying Income Tax on the Gain?
It’s amazing how many people remember an old law that was in
place for many years. The old law, which
was replaced in the late 90s, required that the taxpayer reinvest all of the proceeds
in order to avoid paying income taxes.
Current law allows an exclusion from tax of up to $250,000
of gain for single filers and $500,000 for joint filers. There is no longer a requirement that you buy
a new home. To qualify, you must have
owned and used the home as your principal residence for at least two out of the
five years preceding the sale. Any
excess is taxed as a capital gain.
In English, this means that if you purchased a $250,000
home, you would have to sell it for $500,000 if single or $750,000 if married
before you would have to worry about paying any tax on the gain.