The US tax code was changed many years ago to raise the dollar value
requiring equipment depreciation. I forget the value threshold but remember
it being around $5000. You can do it for smaller items but the record
keeping is a pain. It's much easier to just expense it. Photography is
subject to the "hobby business" scrutiny but the IRS cannot force a business
to make money. They may make you prove that you are really running a
business though. What they actually do depends on the agent processing your
return and it's very inconsistent. /jmac
-----Original Message-----
From: olympus-owner@xxxxxxxxxx [mailto:olympus-owner@xxxxxxxxxx]On
Behalf Of Chuck Norcutt
Sent: Tuesday, January 31, 2006 4:23 AM
To: olympus@xxxxxxxxxx
Subject: [OM] Re: [OT]Are any list members US Tax Accountants?
<< snip
Durable equipment like cameras and lenses, etc. need to be depreciated
over an appropriate period of time unless they cost less than about
$100. When you depreciate equipment you deduct the cost of the
equipment gradually over the assumed life of the equipment. The rate at
which the equipment is depreciated may be linear or non-linear. If
you're going to depreciate equipment you need to read the IRS
publications on depreciation. I figure that no digital camera has a
life greater than three years and use that as my depreciation schedule
for the camera.
Finally, you can deduct expenses against your non-business income
without the business making a profit as it is typical that new
businesses do not make a profit right away. However, if you haven't
reported a profit within three years the IRS will conclude that you're
engaged in a hobby and not a businees and you won't be able to deduct
additional expenses until you make a profit in the business.
<< snip
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