JCT

That IS what my CPA told me..... This is not like doing your ez form taxes. Again this is running a business. "ooops I didn't know" does not fly with the IRS.

You spend 5 years writing off the value of the truck, so if you then at the end now claim it's worth $30,000 and sell it for that, that is a gain.

 

All hail,,,the godfather!!!lol

 

Just want to say as a rule this thread stays upbeat and positive. So unlike many of the other threads I follow. I also noticed most of the haters from my other threads don't drive for JCT! Yay....

 

law states.....

In the United States, individuals and corporations pay income tax on the net total of all their capital gains just as they do on other sorts of income, but the tax rate for individuals is lower on "long-term capital gains," which are gains on assets that had been held for over one year before being sold. The tax rate on long-term gains was reduced in 2003 to 15%, or to 5% for individuals in the lowest two income tax brackets (See progressive tax). Short-term capital gains are taxed at a higher rate: the ordinary income tax rate. The reduced 15% tax rate on eligible dividends and capital gains, previously scheduled to expire in 2008, has been extended through 2010 as a result of the Tax Increase Prevention and Reconciliation Act signed into law by President Bush on May 17, 2006 (P.L. 109-222). In 2011 these reduced tax rates will "sunset," or revert to the rates in effect before 2003, which were generally 20%.
The IRS allows for individuals to defer capital gains taxes with tax planning strategies such as the structured sale (ensured installment sale), charitable trust (CRT), installment sale, private annuity trust, and a 1031 exchange. The United States is unlike other countries in that its citizens are subject to U.S. tax on their worldwide income no matter where in the world they reside. U.S. citizens therefore find it difficult to take advantage of personal tax havens. Although there are some offshore bank accounts that advertise as tax havens, U.S. law requires reporting of income from those accounts and failure to do so constitutes tax evasion.

so..... each year I take a write off for 100% of the lease payment, and get a tax credit and at the end of the entire lease I then claim the value of the truck is $0. now, if i then sell the truck for even $1 that is a gain because I have declared that i have lost the total value of the truck and got a credit each year for the value of the truck payment or lease payment. there is another option, you can depreciate the total value of the truck over 3 years, the first year being the greatest amount and less for the following 2 years. however for the last 2 years of the lease you will not be able to write anything off as far your payments go, so it will put you in a higher tax bracket and you will pay more for the above mentioned years.......

again this is a business that you are running. there is a lot more to it than just driving. JCT provides you with all the tools you need but you will need to know how to use them, or pay someone that does..

 

nicely exlained, fodgather! you rocked it! apple pie for you

(and I did not misspell it!)

 

Hello all. Hope everyone is doing well. Not a good day for me. Truck broke down. Had to get towed in to Freightliner here in Flagstaff. Laid up in a motel for the night.

 

Sorry to hear the bad luck, what happened?

 

Something with the transmission. It started whinning last night as I was getting closer to Winslow. Pulled into the Flying J and checked it out. Didn't see anything out of order. But then again, everything is eternal. Called it a night. Cranked the truck up this morning and same thing. A loud grinding noise. Breakdown told me to try to get it to Freightliner in Flagstaff. I made it about 20 miles down the road and she gave up. Got towed in. So here I am

 

But even though you have a gain... and pay taxes on it 15% or 28%... you still have some money in your pocket from the sale of the truck... would that not be correct? Or are you saying that you would go into the whole even though you sold it? Not arguing the point.... just not had to deal with it yet.

 

i guess it would depend on your total revenue for that year. it may not make that much of a change but it could also put you in the next tax bracket and cost you more.... i guess i would have to have all the numbers to be correct..... not having the write offs for 2 years will affect you for sure. in 2 years you have over $60,000 in payments and no credit towards your income. and we dont make enough in the first 3 years to justify the total loss that fast.......

hope that makes sense.