+1-415-670-9189
info@expertsmind.com
Pros for converting personal property to business use
Course:- Taxation
Reference No.:- EM13860388




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Taxation

Question: "Tax Planning and Fiscal Policy" Please respond to the following:

After reviewing the scenario, discuss at least three (3) pros and three (3) cons for converting personal property to business use, and recommend at least two (2) implementation strategies that would increase the depreciable bases used to calculate depreciation expense. Provide support for your recommendation.

From the e-Activity, imagine that you have started a business and have purchased business assets, such as computer equipment, vehicles, and a building. Suggest at least two (2) implementation strategies to help you ensure that you are calculating the correct amount of depreciation. Provide specific examples of such strategies.

Answered:-

Verified Expert


Preview Container content

Converting a personal property into a business property has some advantages as well as disadvantages but many of the experts argue that the tax benefits received by converting it outweigh the disadvantages altogether.The advantages of converting a personal property into a business property are given below:

• Depreciation ?Depreciation becomes a magical way to reduce the taxes once a personal property is converted into a business property. In every financial year, the owner can write off a portion of the property’s purchase cost as an expense, which will help in reduction of the taxable income.

• Dual-Use Deductions ?If a person can use creativity then he can make use of the dual deductions that can be done on the taxable income. For example, a person can write off a portion of his phone bill if he uses the same phone for personal as well as for business use.

• Rental income ? if a personal property is converted into a business property, it can also be sold to someone on contract basis for which the person will have to pay regular amount of money, also known as rent. Thus, rent can become one of the biggest advantages of converting a personal property into a business property.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Taxation) Materials
Proposed changes to the tax code continue to be debated as the country struggles with the effects of large budget deficits. What changes would you recommend to the tax system
How much tax revenue will the Freedmanian government collect from a typical consumer? Use a graph with medicine on the horizontal axis and tequila on the vertical axis to e
Sam Tangy feels that the top management group should own a substantial amount of Tangy stock to ensure that the interest of management correspond with the shareholder intere
For tax purposes, why is the married filing jointly tax status generally preferable to the married filing separately filing status? Why might a married taxpayer prefer not t
The corporation also borrowed $250,000 from ACME Venture Capital to finance operating costs and capital expenditures - first few years of operation and the corporation sustain
ACC 304 Taxation Law: Tax Practice Assignment. Running for Life - Running for Life opened for business on 1 July 2015. The accounting profits and losses are to be shared equa
There is a significant amount of gray area when interpreting tax regulations. There are several resources available to assist tax preparers in addressing these issues, such
What amount and character of gain or loss must each partner recognize on the formation of the partnership and what is each partner's basis in his or her partnership interest