tax plan remove int deduc (by David [MI]) Apr 25, 2017 6:29 AM
tax plan remove int deduc (by Emily [TX]) Apr 25, 2017 6:51 AM
tax plan remove int deduc (by Emily [TX]) Apr 25, 2017 7:21 AM
tax plan remove int deduc (by David [MI]) Apr 25, 2017 7:52 AM
tax plan remove int deduc (by WMH [NC]) Apr 25, 2017 8:17 AM
tax plan remove int deduc (by Emily [TX]) Apr 25, 2017 3:09 PM
tax plan remove int deduc (by David [MI]) Apr 26, 2017 6:31 AM
tax plan remove int deduc (by Emily [TX]) Apr 26, 2017 9:10 AM
tax plan remove int deduc (by David [MI]) Posted on: Apr 25, 2017 6:29 AM Message:
So I hope this is fake news, but I have seen multiple reports that the tax overhaul being considered in congress includes removing the ability for businesses (not primary residence) to deduct loan interest?? please tell me there's some nuance to this that doesn't include your vanilla real estate mortgage interest!
--12.156.xxx.xx |
tax plan remove int deduc (by Emily [TX]) Posted on: Apr 25, 2017 6:51 AM Message:
The long and short of this is that the overall idea allows 100% depreciation (immediate expensing of all fixed assets) and as an offset disallows interest deductions.
Some proposals have this as elective, some as mandatory. --155.201.xx.xx |
tax plan remove int deduc (by Emily [TX]) Posted on: Apr 25, 2017 7:21 AM Message:
I work in depreciation/like-kind exchange asset tracking and many of our clients are doing "what if" scenarios with projected depreciation and deferred gains several years down the road to see what their position might be on this, if it becomes reality. Obviously immediate expensing of formerly depreciable assets is a huge benefit to capital-intensive businesses. But that is a temporary difference; eventually you would still recover the asset cost through depreciation. The disallowance of interest expense would be permanent. --155.201.xx.xx |
tax plan remove int deduc (by David [MI]) Posted on: Apr 25, 2017 7:52 AM Message:
I don't understand how immediate expensing could work. Let's say you buy a $100k house with a 20% downpayment. You expense the whole $100k, even though your actual expense is the downpayment plus monthly debt payments? --12.156.xxx.xx |
tax plan remove int deduc (by WMH [NC]) Posted on: Apr 25, 2017 8:17 AM Message:
That's how it works with Section 179 deductions. They are immediately expensed up to the limit in the year in which (whatever it is) is placed in service, even if you are making payments.
We bought a van, expensed the entire purchase price in 2015, even with a zero-interest loan for three years that we couldn't resist. --173.22.xx.xx |
tax plan remove int deduc (by Emily [TX]) Posted on: Apr 25, 2017 3:09 PM Message:
David - Tax depreciation expenses are completely unrelated to how much you are paying at once/if there is financing.
You can buy a building with cash, have a 15 year note, a 30 year note, or some other financing - and your tax depreciation will be exactly the same. --155.201.xx.xx |
tax plan remove int deduc (by David [MI]) Posted on: Apr 26, 2017 6:31 AM Message:
Emily, that is exactly my point. The proposed change will let you deduct the full amount of the purchase price even if you only pay a small down payment --12.156.xxx.xx |
tax plan remove int deduc (by Emily [TX]) Posted on: Apr 26, 2017 9:10 AM Message:
Yes. Sounded like you didn't understand how it would work or how cash payments and/or loans are related (or not related) to depreciation deductions. --155.201.xx.xx |
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