Amortizing Expenses (accounting for a computer purchase)

Robert Caravella on

Our club is purchasing a computer solely for
investing/creating investor reports. There would be
significant tax advantages if we could properly expense it
as a deductible expense. Does anyone know how to do this?
I assume it has to be amortized using MACRS. But I don't
know how to handle the accounting on Bivio. Thanks

Deborah J. Rollins-Thorne on

I would suggest contacting support@bivio.com to set up a
depreciable asset. I would also suggest discussing the
purchase with your club again before making the purchase,
because it's doubtful that it would create a significant tax
advantage. It's possible that your none of your members
would receive any tax benefit, because investment club
expenses pass-thru to each members Schedule A as a misc.
deduction. First, you have to generate a Schedule A on your
personal tax return, and second the only tax benefit
received from the misc deductions section of the Schedule A
is the amount that exceeds 10% of the members adjusted gross
income.

Debi

Robert Caravella wrote:
> Our club is purchasing a computer solely for
> investing/creating investor reports. There would be
> significant tax advantages if we could properly expense it
> as a deductible expense. Does anyone know how to do this?
> I assume it has to be amortized using MACRS. But I don't
> know how to handle the accounting on Bivio. Thanks

Deborah J. Rollins-Thorne on

Let me correct that last statement!!!!!!!!!!

It should say 2% and NOT 10%. Sorry..... I should probalby
let Ira and Rip answer the questions.

Debi

Deborah J. Rollins-Thorne wrote:
> I would suggest contacting support@bivio.com to set up a
> depreciable asset. I would also suggest discussing the
> purchase with your club again before making the purchase,
> because it's doubtful that it would create a significant tax
> advantage. It's possible that your none of your members
> would receive any tax benefit, because investment club
> expenses pass-thru to each members Schedule A as a misc.
> deduction. First, you have to generate a Schedule A on your
> personal tax return, and second the only tax benefit
> received from the misc deductions section of the Schedule A
> is the amount that exceeds 10% of the members adjusted gross
> income.
>
> Debi
>
> Robert Caravella wrote:
> > Our club is purchasing a computer solely for
> > investing/creating investor reports. There would be
> > significant tax advantages if we could properly expense it
> > as a deductible expense. Does anyone know how to do this?
> > I assume it has to be amortized using MACRS. But I don't
> > know how to handle the accounting on Bivio. Thanks

Rip West on

Debi,

It should say 2% and NOT 10%. Sorry..... I should probalby let Ira and Rip answer the questions.
>>

Naw, you're doing just fine. Sometimes it takes me 3 tries to get it right<g>. I agree with what you said about the limited value of writing off the computer. If the original poster really wants to go ahead with this and amortize the cost, he can accomplish this by setting up a new cash account called computer. Then, he would make a transfer from cash to the computer account for the amount of the computer cost. Yearly, he would expense the annual depreciation from the computer account. This would accomplish his objective. It wouldn't satisfy all the reporting requirements of the Federal partnership return, but it would give him the correct taxable income.

Rip West
Saint Paul, MN

Rob Nagler on

Rip West writes:
> Sometimes it takes me 3 tries to get it right<g>.

I thought you always had it right, Rip? At least that's what you
always tell me. ;-)

Rob

Deborah J. Rollins-Thorne on

Rip West wrote:
> Naw, you're doing just fine. Sometimes it takes me 3 tries
> to get it right<g>. I agree with what you said about the limited value of
> writing off the computer. >

Thank you for your kind words Rip. Sometimes I actually KNOW
what I'm talking about, but my fingers tend to type in
another world. :)

Debi

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