depreciation of gear at DVinfo.net

Mike Cornett · January 4th, 2007, 04:12 PM

Hello. I apprecaite any and all advice.

I need to figure out what my equipment is worth. My accountant is going to ammend my taxes. I didn't use them as write offs. I'm a rookie at this?!

Anyway, is there a ball park percentage that I can apply? Like 10% or 20%?

Here's a list of equipment:

Panasonic DVC 80 (which is rare and from the looks of it has held a good value)
2 pc Lowel light kit
Adzen wireless mic
tripod
G4 Quicksilver Dual 1.25 ???

Software:
Should I include????

Thanks.

Jim Michael · January 4th, 2007, 04:50 PM

One way would be to visit eBay and see what those things are selling for. The items you describe have a real depreciation (what you could likely buy/sell it for) that varies according to the type of equipment, e.g. a 3 year old video camera might not be worth as much on a percentage basis as an XLR microphone, so the flat percentage across the board might not be fair.

Don Donatello · January 4th, 2007, 09:34 PM

i depreciate any item $250 (or more) over 5 years including software/equipment/auto etc = so that's 20% year .. there are other formula's that depreciate more in the 1st few years and less in later years ( which i believe my tax person uses on auto) ...
if i stop using a software item at say 2 years then in that current tax year i'll write off the remaining 3 years (value) as a loss ...
if i buy a item for one project then i'll write it off in the current year ( usually sell it after the project = deduct the sale price from what i paid = loss for current year)

IMO include any software that you use in your business

if you bought camera in 2002 and you are amending 2002 then you use the price you paid ...

don't forget auto miles , parking , airfares , travel, hotels , meals out of town,

Jim Michael · January 5th, 2007, 07:49 PM

Was the question about establishing a cost basis for the equipment or which depreciation schedule to use? Since the accountant was asking for the number it sounded like they were trying to establish the current value of the equipment. I would have thought the accountant would know how the equipment would get depreciated, tax-wise. The depreciation methods used for taxes often don't accurately track real depreciation (i.e. what something is really worth in today's market place), especially with technology like video cameras.

Don Donatello · January 5th, 2007, 08:48 PM

Jim - you are correct about the orginal question ...
i mis-read or should i say thought i read something else = happens with the aging process !!!!

i not sure that when it comes to tax depreciating the "maket value" ( other then where you start) has any basis in depreciating a item over 5 years .. at the end of 5 years it is worth some amount but you end up writing off the total amount paid ...

Steve House · January 6th, 2007, 06:41 AM

You need to sit down with your accountant. The revenue folks have regulations that define the length of time and the amount you can write off per year, based on the type of asset it is. Your starting value is the value of the gear at the time it is placed into business service - the purchase price of the gear if it went directly into business use or the depreciated value at the time it went into business service if you initially purchased it for personal use and then later converted it to business.

Steve House · January 6th, 2007, 06:45 AM

Quote:

Originally Posted by Don Donatello

Jim - you are correct about the orginal question ...
i mis-read or should i say thought i read something else = happens with the aging process !!!!

i not sure that when it comes to tax depreciating the "maket value" ( other then where you start) has any basis in depreciating a item over 5 years .. at the end of 5 years it is worth some amount but you end up writing off the total amount paid ...

And if you sell it after it's been depreciated, the difference between the price you get for it and its remaining value has to be declared as income.

January 4th, 2007, 04:12 PM	#1
Mike Cornett Regular Crew Join Date: Apr 2004 Location: Dayton, Ohio Posts: 43	depreciation of gear Hello. I apprecaite any and all advice. I need to figure out what my equipment is worth. My accountant is going to ammend my taxes. I didn't use them as write offs. I'm a rookie at this?! Anyway, is there a ball park percentage that I can apply? Like 10% or 20%? Here's a list of equipment: Panasonic DVC 80 (which is rare and from the looks of it has held a good value) 2 pc Lowel light kit Adzen wireless mic tripod G4 Quicksilver Dual 1.25 ??? Software: Should I include???? Thanks. __________________ -Mike

January 6th, 2007, 06:41 AM	#6
Steve House Inner Circle Join Date: Mar 2005 Location: Hamilton, Ontario, Canada Posts: 5,742	You need to sit down with your accountant. The revenue folks have regulations that define the length of time and the amount you can write off per year, based on the type of asset it is. Your starting value is the value of the gear at the time it is placed into business service - the purchase price of the gear if it went directly into business use or the depreciated value at the time it went into business service if you initially purchased it for personal use and then later converted it to business. __________________ Good news, Cousins! This week's chocolate ration is 15 grams!

January 4th, 2007, 04:50 PM	#2
Jim Michael Major Player Join Date: Dec 2005 Posts: 895	One way would be to visit eBay and see what those things are selling for. The items you describe have a real depreciation (what you could likely buy/sell it for) that varies according to the type of equipment, e.g. a 3 year old video camera might not be worth as much on a percentage basis as an XLR microphone, so the flat percentage across the board might not be fair.

January 4th, 2007, 09:34 PM	#3
Don Donatello Hawaiian Shirt Mogul Join Date: Nov 2001 Location: northern cailfornia Posts: 1,261	i depreciate any item $250 (or more) over 5 years including software/equipment/auto etc = so that's 20% year .. there are other formula's that depreciate more in the 1st few years and less in later years ( which i believe my tax person uses on auto) ... if i stop using a software item at say 2 years then in that current tax year i'll write off the remaining 3 years (value) as a loss ... if i buy a item for one project then i'll write it off in the current year ( usually sell it after the project = deduct the sale price from what i paid = loss for current year) IMO include any software that you use in your business if you bought camera in 2002 and you are amending 2002 then you use the price you paid ... don't forget auto miles , parking , airfares , travel, hotels , meals out of town,

January 5th, 2007, 07:49 PM	#4
Jim Michael Major Player Join Date: Dec 2005 Posts: 895	Was the question about establishing a cost basis for the equipment or which depreciation schedule to use? Since the accountant was asking for the number it sounded like they were trying to establish the current value of the equipment. I would have thought the accountant would know how the equipment would get depreciated, tax-wise. The depreciation methods used for taxes often don't accurately track real depreciation (i.e. what something is really worth in today's market place), especially with technology like video cameras.

January 5th, 2007, 08:48 PM	#5
Don Donatello Hawaiian Shirt Mogul Join Date: Nov 2001 Location: northern cailfornia Posts: 1,261	Jim - you are correct about the orginal question ... i mis-read or should i say thought i read something else = happens with the aging process !!!! i not sure that when it comes to tax depreciating the "maket value" ( other then where you start) has any basis in depreciating a item over 5 years .. at the end of 5 years it is worth some amount but you end up writing off the total amount paid ...