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HiPointDem

(20,729 posts)

42. But workers can't deduct the value of their "lost wealth" from their taxes, correct?

Reply to HooptieWagon (Reply #19)

Sat Apr 14, 2012, 03:56 AM

Apr 2012

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I do NOT understand depreciation. Can somebody help me? I need it explained like a 5 year old. [View all] Kali Apr 2012 OP

This might be close: The Straight Story Apr 2012 #1

Yes, thats pretty much it. Furthermore... HooptieWagon Apr 2012 #4

ok but Kali Apr 2012 #9

Ok, let's see....try this The Straight Story Apr 2012 #11

Yes, you made cash, but you lost wealth. HooptieWagon Apr 2012 #14

and also avoided paying tax on that cash right? Kali Apr 2012 #17

Yes, because the wealth you lost was greater than the cash you made. HooptieWagon Apr 2012 #19

But workers can't deduct the value of their "lost wealth" from their taxes, correct? HiPointDem Apr 2012 #42

No. Depreciation is a deduction for businesses. HooptieWagon Apr 2012 #45

I run an isolated total cash business quaker bill Apr 2012 #18

that does make some actual sense to me, believe it or not! Kali Apr 2012 #22

if there is depreciation Celebration Apr 2012 #33

would an inheritance of a farm count? (or purchasing an existing business) Kali Apr 2012 #34

why don't you ask him? Celebration Apr 2012 #35

I would think depreciation could be claimed on farm structures. HooptieWagon Apr 2012 #46

Trust me. A car costs more as it depreciates. Jamastiene Apr 2012 #31

Welcome to the wonderful world of accounting. sendero Apr 2012 #36

It's the opposite of appreciation panader0 Apr 2012 #2

makes a HELL of a lot more sense Kali Apr 2012 #10

Hah! Best explanation of depreciation EVER! Thanks - n/t coalition_unwilling Apr 2012 #51

a tax professional quinnox Apr 2012 #3

No pro here, but I think it means what you got, isn't worth what you paid for it? Thus a loss and freshwest Apr 2012 #5

suppose you have a piece of equipment Celebration Apr 2012 #6

no Kali Apr 2012 #12

yes year four Celebration Apr 2012 #32

This is a pretty good description longship Apr 2012 #26

It's value lost gradually on an item purchased for a business or even personal stuff. Cleita Apr 2012 #7

Depreciation is one of the factors reported on Schedule C (profit or loss from business). enough Apr 2012 #8

or in this case schedule F Kali Apr 2012 #15

It's all a tax dodge but it is how it's done csziggy Apr 2012 #21

I think I get it now Kali Apr 2012 #24

He is also probably getting a lower property tax HooptieWagon Apr 2012 #48

If you had a business and bought a brand new company car worth $30,000.00 Larry Ogg Apr 2012 #13

In terms of business taxes, here's how it works Yo_Mama Apr 2012 #16

Maybe this will help...sometimes I am not real clear though... Drew Richards Apr 2012 #20

I haven't done taxes professionally for about twenty years, but here goes customerserviceguy Apr 2012 #23

I am pretty sure the only assets to be depreciated in this situation are heifers kept to replace old Kali Apr 2012 #25

After all the technical explanations, what you want to know is... TreasonousBastard Apr 2012 #27

oh you nailed it Kali Apr 2012 #30

If you sell the rental, the gain is calculated on the depreciated value taught_me_patience Apr 2012 #38

Hah! LOL - n/t coalition_unwilling Apr 2012 #52

Let me cut to the chase, It is a taxpayer supported subsidy to businesses Egalitarian Thug Apr 2012 #28

It recognizes the difference between things bought for investment and things bought for consumption customerserviceguy Apr 2012 #40

Even your hypothetical cannot make an honest comparison to support your opinion. Egalitarian Thug Apr 2012 #41

I have to have a car to get to my job. Why can't I deduct depreciation on the car as a business HiPointDem Apr 2012 #43

Transportation to and from work cant be expensed HooptieWagon Apr 2012 #47

In the tax code I'd design, you would customerserviceguy Apr 2012 #50

No it is not dems_rightnow Apr 2012 #44

Lumberjack Jeff, LLC, bought a log truck. lumberjack_jeff Apr 2012 #29

You can have a loss resulting from normal depreciation schedule taught_me_patience Apr 2012 #37

In accrual accounting depreciation is an expense. trackfan Apr 2012 #39

also: it's timing issue, matching revenue with expense ctaylors6 Apr 2012 #49