|
Dave NE IA
02-21-2006 12:06:26
|
|
Re: OT; new farm driveway and taxes in reply to Joe Thompson, 02-21-2006 07:46:51
|
|
| |
If you trust your tax man, he can probably send you in the corret direction with this one better than us red necks with a keyboard. I'm no expert, but I sure know alot that do deduct it. I would asume depreciation chart dealing with cement will probably suggest ten years from my last recolection. Animal husbandry may play in depending on the sole purpose of the driveway. It will depend on your tax mans ---opinion----and as you know everyone has one. In our area we have been over blessed with local option taxes and a hungry state government. To help offset this our local cement plant makes two, (well now days three) charges on their invoices. First is the cost of the concrete, approx $40.00 per cubic yard (TAXABLE), then they charge another $40.00 for trucking (NON TAXABLE), and then a % for fuel charge. In Iowa or perhaps my county rather there is no sales tax on the trucking. Thus the sales tax is basickly cut in half. From what I understand the depreciation / tax etc. gets in a push pull, situation with the federal income and state income taxes. (with a few tax men) In Iowa, sales tax does not apply to the labor portion of total renovation, remodeling, or new construction. Many times it is a hard call for me to charge sales tax or not. Alot of contractors just charge sales tax straight across the line regardless. The 7% sales tax is a pretty good savings for the farmer, but if his tax man decides to take it as a repair job for state and federal tax purposes it throws a real wrench in the gears, and a red flag for the IRS. So for your practical purposes you may have to prove in a audit it was for the purpose of business, and not for your house driveway. I would say 90% of my customers would take it with out batting a eye. I spent two and a half years with the IRS, but saved or proved I did not owe around 14,000.00 from the IRS original claim. My accountant got over half that to prove it however. In addition I would like to coment that they found absolutly no errors in my accounting, yet it cost me alot of hard earned money to prove it. If you watch my post / responces you can many times notice a chip on my shoulder when government is mentioned. As I preveously mentioned some contractors charge the sales tax straight across to cover them selves, think of how greatfull my friends were when they filed a appeal because of my persistant nagging them to seak a appeal. I'm speaking of some friends that put up approx. seven million dollars worth of hog buildings in the last ten years or so, and got all the sales taxes back. (you do the math) Back to dealing with your issue, taking it seems probably ok, if not I might be in a cell next to you and we can talk old tractors. Dave NE IA
|
|
|
