Discussion:Client wants a new car to lower profit

Pickup trucks with 6 foot beds = 6000 lbs GVW. Either way - 5800 lbs isn't going to work for § 179. But yes, I do believe SMR for the first vehicle and actual for the replacement vehicle is allowable.

Sorry - maybe I've just confused you more!

I recommended to our senior pastor the other day that our church buy a SUV to get in good with the Muslim's who've set up a prayer house around the corner. He's partial to vans though, on account of entertaining his girlfriends.

Just ask those folks who invested in LP's in the 80's how that worked out for them.

Just ask those folks who attempted to hold their ISOs 12 months in 1999-2000 how that worked for them.

Or ask those folks who 1031 exchanged into a TIC in 2006-2007 how it is working out for them. Oh wait! They haven't yet realized that their investments are now hosed.

Unfortunately for us in this business, we will lose clients if we congratulate them about their profitability and recommend (after suggesting real solutions) that they are just better off paying the tax.

http://www.writing.com/main/view_item/item_id/312669-MONEY-SCREAMS

The government requires you to put a sign on the back, saying "Free money, For Banks Only. Others Need Not Apply."

Seaside CPA - so if the OP's client puts sand bags weighing 200 lbs in the back of the SUV, it would qualify?

I've been under the impression it's the manufacturers stated GVW that counts (the one on the label of the driver side door jamb).

I have clients who constantly add bells & whistles to their vehicles (like lumber/ski/luggage racks etc) that can boost the GVW. And you can always fill up the gas tank just before you go have the vehicle weighed - which is required in CA when registering a truck (or even an SUV if on a truck chassis.)

Of course, we are all missing a big point here....just filling that SUV up constantly with gas will lower profits!

Couple years ago a client was having a good year and I suggested if he was going to buy a truck, do before year end. He bought a truck and refers to it as the truck I TOLD him to buy.

Jimi - if you bring one in from out-of-state, you have to have it weighed (at least in my county....perhaps it's a county by county requirement). New ones, I do think the dealer takes care of it for you.

It sounds to me that he doesn't know what to do with his money and wants a new toy.

I'd first suggest a pension plan to lower the profit. It will serve him better in the long run.

"The the dealer says this is a once-in-a-lifetime opportunity. Last time for full depreciation. What do you think?" Well, ma'am, you already have a loss for 2008, the deduction really will not apply/help you.

"But....once-in-a-lifetime! Last chance! Ya know, the 2005 Escalade is getting old." Yeah, but you do have a loss already. You are under water on the Escalade loan by $12-13k. You will have to take a check for at least that to buy this thing. Business is way off. You are already carrying a lot of debt. You do not sound excited about 2009. AND, it is not going to help on your taxes. I just do not think this is the right thing to do now.

As you can guess, she bought it anyway. Roll the clock forward and business is WAY off. They made a total of 4 payments on the Rover. Now bank is talking about repo. Client asked me..."Can we at least write off the loss?" LOSS?!?! What loss? You will have COD income of probably $20+k.

Oh well, time for a PBR!

I got a client with $100K+ of NOL's, $300K of passive loss c/f, $70K of cap loss c/f, and $100K of investment interest c/f's. And he called last week to make to find out if BK would be better for him on his taxes than a short sale, even though it would hurt his credit more. You gotta be kidding me! Taxes? Credit? They are both zero.

Sorry, lack of sleep. Stock market down. Feeling punchy.

I hope he likes it.

or better yet, I hope you both like it.

http://www.youtube.com/watch?v=2UihIjK9xm4

A lot of these guys form a company for the sole purpose of buying cars (of course, they're wrong, but it's the tax people that suffer for it). As they get older and fatter, naturally, their equipment get's smaller (or looks smaller), so they run to the car dealer for the biggest car they can buy.

Then, they criticize their wife or other for spending money on clothes and jewelry and what not.

Thank God, I was so blessed that even a larger wasteline has not dimished the size of my errr sedan. For this reason, I drive a used Yugo.

BLRG, if you will read the discussion from the top down, you will see that you already gave great advice. Except for the part about the 'whole'. But we all make spelling mistakes - especially me.