Discussion:Mechanics Tools Depreciable & Sec. 179
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Discussion Forum Index --> Tax Questions --> Mechanics Tools Depreciable & Sec. 179
| 26 February 2006 | |
| I have a new client who wants to Depreciate and Sec. 179 his mechanics tools.
This is his first job and he is required to provide his own tools. Is this allowable? | |
DR BRISKET (talk|edits) said: | 26 February 2006 |
| Most definitely. I've dealt with several mechanics over the years. Oftentimes, mechanics will purchase tools over a period of time from places like Snap On. Most small hand tools I will directly expense on Schedule C for self employed, or Form 2106 for employees, and actually call the expenditure "Small Hand Tools". My theory is that many of these tools will break, wear out, or get lost long before seven years, the length of time they would be depreciated. Obviously, some of the more expensive tools will need to be isolated and set up on depreciation. Of course, they can then be Sec. 179'd. However, you should caution your client about the depreciation recapture rules for Sec. 179 treatment. | |
| 26 February 2006 | |
| Most large established CPA firms will not depreciate items less than $1000. There are thoses conservative accoutants that will depreciate a $10 music CD. Use your judgement. Never heard of an audit over assetes less than $1000. | |
DR BRISKET (talk|edits) said: | 27 February 2006 |
| My very first accounting job many years ago was with an electronics and appliance wholesale distributor. Their controller(who I eventually replaced after he retired) was from the old, old school. On the depreciation schedule were a half dozen or so PENCIL SHARPENERS, the kind you mounted on a wall, and had the hand crank. They were listed separately, each one costing $4.98. They were set up for ten years at 50 CENTS PER YEAR!--I am telling you the truth!! Boy, did I have fun clearing up that once the reins were handed over to me!!! | |
| 27 February 2006 | |
| Thanks for the input. I had made the decision to depreciate the tools and sec. 179 them.
It was difficult to find anything definitive on it. Thanks for your responses. | |
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