Respectfully, to provide a better understanding...
Post# of 22940
(Total Views: 358)
Posted On: 08/03/2017 11:10:34 AM
Re: kmmohr1960 #19491
Respectfully, to provide a better understanding... 
It's all about the accounting
Once you have written off a piece of equipment thru a depreciation (specifically called a "straight line depreciation), from an accounting standpoint, and more importantly, a tax standpoint, the equipment has no book value on the company balance sheet.
It can then be stated on the balance sheet as having no value as an asset after the depreciation time have elapsed, (in this case, 7 years) and can be stated as such in the Q's
Even though the equipment may have an intrinsic value as a stand alone piece of equipment, it is not considered to have value on the companies books.
If it's past it's depreciation term, you can't claim it on the books.
Also...in regards to taxes..
"The amount of the annual depreciation reported on the U.S. income tax return is based on the tax regulations. Since depreciation is a deductible expense for income tax purposes, the corporation's taxable income (and associated tax payments) will be reduced by its tax depreciation expense"
So, I don't think anything is being spun here....it is the by-product of having a 70,000 page tax code..
Hope this helps and I hope I explained it in a way that is understandable (and that I got it right...
It's all about the accounting Once you have written off a piece of equipment thru a depreciation (specifically called a "straight line depreciation), from an accounting standpoint, and more importantly, a tax standpoint, the equipment has no book value on the company balance sheet.
It can then be stated on the balance sheet as having no value as an asset after the depreciation time have elapsed, (in this case, 7 years) and can be stated as such in the Q's
Even though the equipment may have an intrinsic value as a stand alone piece of equipment, it is not considered to have value on the companies books.
If it's past it's depreciation term, you can't claim it on the books.
Also...in regards to taxes..
"The amount of the annual depreciation reported on the U.S. income tax return is based on the tax regulations. Since depreciation is a deductible expense for income tax purposes, the corporation's taxable income (and associated tax payments) will be reduced by its tax depreciation expense"
So, I don't think anything is being spun here....it is the by-product of having a 70,000 page tax code..
Hope this helps and I hope I explained it in a way that is understandable (and that I got it right...
(5)
(0)