Farkles

zimm

Expedition Leader
My build date is Dec.

Delivery likely late q1 early q2.

This does tax avoidance no good whatsoever, I need possession by dec31 for a 179.

Anyone with any slick ideas?
 

utherjorge

Observer
This could very well be a stupid question, but if you paid in full this year, even if you didn't take delivery....would that count? I mean, you paid for the goods, even if you did not yet take delivery?
 

zimm

Expedition Leader
This could very well be a stupid question, but if you paid in full this year, even if you didn't take delivery....would that count? I mean, you paid for the goods, even if you did not yet take delivery?
No. I have to have possession by dec 31. Can I write it off? Sure. Wiould I get corn holed in an audit? Yeppers. No more corn, please.
 

utherjorge

Observer
No. I have to have possession by dec 31. Can I write it off? Sure. Wiould I get corn holed in an audit? Yeppers. No more corn, please.
I will have to take your word for that RE: audit. Having said that...I feel like there has to be some sort of tax shenanigans that could apply here.
 

utherjorge

Observer
What is this tax issue? Is it some sort of EU VAT change?
The way I understand it (and this is a US thing, but EU, as I live in the US) there are ways to write off certain values based on usage for vehicles and other things. However, delivery must be taken by 12/31.

I didn't dive in to deep but I did ask my tax guy, and in essence he said you could take delivery after, considering a deposit was paid...but he did not think that would hold up under scrutiny if the IRS looked too closely.
 

Ozarker

Pontoon Admiral
No. I have to have possession by dec 31. Can I write it off? Sure. Would I get corn holed in an audit? Yeppers. No more corn, please.
You can claim ownership and possession with title, you hold title after payment has been made.

Possession, for tax purposes means "control", if you control the use, function and title to an asset you have possession. I can have my boat moored in Florida, but most of the time it will be in Missouri, I live in Mo., I hold title and control the use and function of the boat from Mo. I can claim and pay taxes in Mo. instead of Fl.

Assuming your issue is personal property taxes.

If your issue is Federal, such as under Section 179, you can still claim possession after paying for the title, EXCEPT, you must be able to place that asset "in service" of the business purpose.

Frankly, if you can show you purchased an asset, I've never seen nor heard of any tax examiner requiring proof of the date an asset was used for business nor where anything sat on 12-31at midnight or before.

BTW, an asset can be placed in service of a business simply by accepting title. If the business benefits from ownership, it is in service. Example: If you are an Uber driver and you advertise that in March, you can pick up customers in a new XYZ, that may promote the business, even if the benefit is to be received in the future, a vehicle can be "in service".
 

Sid Post

Observer
The way I understand it (and this is a US thing, but EU, as I live in the US) there are ways to write off certain values based on usage for vehicles and other things. However, delivery must be taken by 12/31.

I didn't dive in to deep but I did ask my tax guy, and in essence he said you could take delivery after, considering a deposit was paid...but he did not think that would hold up under scrutiny if the IRS looked too closely.

Jorge,

I tend to think your "tax guy" is simply wrong or is overly conservative based on the Political Talking points of various personalities in mass media or, you simply misunderstood the conversation.

If you have the final bill of sale by Dec 31st, you can and should claim it as appropriate on your taxes. Many farmers and ranchers do this at year-end because of write-offs and lack of stock at the dealerships. I'm not a tax attorney so, take my advice with a bit of caution and do your own "due diligence".

In my case, when I buy a Bush Hog (aka Rotary Mower) for my pastures, what do you think I am doing with it in late December or in January? Whether it sits in my pasture next to my tractor or, on the dealer's lot or, on a truck somewhere in transit, what is the real difference in my usage and taxes? Zero, Zilch, Nada as long as I have a legal bill of sale! People get confused over titled vehicles but, if my farm truck is or isn't registered in the current tax year has no impact on my Federal Income tax deductions.

There may be some grey area in your conversation and understanding of what your "tax guy" said and what he or she meant. If you have a bill of sale in hand, you own it. Since it isn't next year yet, take your bill of sale to your tax guy and quit stressing over scare tactics of an "audit". You have what you need for an audit and no, the IRS Agents are not coming out to your house or business to inspect your vehicle either!
 
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Sid Post

Observer
You can claim ownership and possession with title, you hold title after payment has been made.

Possession, for tax purposes means "control", if you control the use, function and title to an asset you have possession. I can have my boat moored in Florida, but most of the time it will be in Missouri, I live in Mo., I hold title and control the use and function of the boat from Mo. I can claim and pay taxes in Mo. instead of Fl.

Assuming your issue is personal property taxes.

If your issue is Federal, such as under Section 179, you can still claim possession after paying for the title, EXCEPT, you must be able to place that asset "in service" of the business purpose.

Frankly, if you can show you purchased an asset, I've never seen nor heard of any tax examiner requiring proof of the date an asset was used for business nor where anything sat on 12-31at midnight or before.

BTW, an asset can be placed in service of a business simply by accepting title. If the business benefits from ownership, it is in service. Example: If you are an Uber driver and you advertise that in March, you can pick up customers in a new XYZ, that may promote the business, even if the benefit is to be received in the future, a vehicle can be "in service".

Regarding 'in service" dates, those can be delayed from a tax reporting or deduction perspective if you want to.

I can buy a >$100K tractor this year and claim an "in service date" next year if that better serves my needs for agriculture deduction offsets.

Likewise, the "in service" start date could mean almost anything. Am I going to use it to feed my cattle hay bales in late February or December? Or, am I just going to admire it as I look forward to the Spring hay season? The "bill of sale" makes no mention of when the tractor arrived at my dealer, when the dealer loaded it for delivery to me, nor when it was dropped off at my gate!
 

Sid Post

Observer
Regarding the OP:

We really don't know what the end use of this vehicle is for so, we are left to guess.

If it is agriculture-related, I can help with what has worked for me in the past.

In terms of business use, I know a little about leases but, that is a totally different topic as well.

Regarding AGRICULTURE TAX EXEMPTIONs, I have seen Cadillac sedans with farm tags and tax exemptions that have NOT seen a dirt road in their life, much less a hay bale or sack of range cubes. Most of them haven't even seen a brush for a horse at the stables either! And no, I am not talking about a farmer or rancher that only has 'farm' income either!
 

Ozarker

Pontoon Admiral
Regarding 'in service" dates, those can be delayed from a tax reporting or deduction perspective if you want to.

I can buy a >$100K tractor this year and claim an "in service date" next year if that better serves my needs for agriculture deduction offsets.

Likewise, the "in service" start date could mean almost anything. Am I going to use it to feed my cattle hay bales in late February or December? Or, am I just going to admire it as I look forward to the Spring hay season? The "bill of sale" makes no mention of when the tractor arrived at my dealer, when the dealer loaded it for delivery to me, nor when it was dropped off at my gate!

True, but to begin any type of depreciation for taxes or the books of a publicly held entity, the asset must be declared as "placed in service" to begin any schedule, straight line, double declining balance, Section 179, whatever.

Leases are a bit different, as to the lease agreement is made rather than title, the use, function and control remain the same. The value of the lease is depreciated rather than the cost or market value, whichever is less.

Dang, I knew a Master's in Accounting/Finance would come in handy someday...... :)
 
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utherjorge

Observer
Jorge,

I tend to think your "tax guy" is simply wrong or is overly conservative based on the Political Talking points of various personalities in mass media or, you simply misunderstood the conversation.

If you have the final bill of sale by Dec 31st, you can and should claim it as appropriate on your taxes. Many farmers and ranchers do this at year-end because of write-offs and lack of stock at the dealerships. I'm not a tax attorney so, take my advice with a bit of caution and do your own "due diligence".

In my case, when I buy a Bush Hog (aka Rotary Mower) for my pastures, what do you think I am doing with it in late December or in January? Whether it sits in my pasture next to my tractor or, on the dealer's lot or, on a truck somewhere in transit, what is the real difference in my usage and taxes? Zero, Zilch, Nada as long as I have a legal bill of sale! People get confused over titled vehicles but, if my farm truck is or isn't registered in the current tax year has no impact on my Federal Income tax deductions.

There may be some grey area in your conversation and understanding of what your "tax guy" said and what he or she meant. If you have a bill of sale in hand, you own it. Since it isn't next year yet, take your bill of sale to your tax guy and quit stressing over scare tactics of an "audit". You have what you need for an audit and no, the IRS Agents are not coming out to your house or business to inspect your vehicle either!
lol you're wrong all over the place today

Hoping that the OP comes back, as his "tax guy" and my "tax guy" were in agreement. Perhaps you simply didn't read effectively.

As far as I know, he paid something but was not going to actually have the asset until who knows when in 2024. That date probably matters, but it was definitely in a different calendar year than when he paid, either in full or in a deposit.

Feel free to play fast and loose with your taxes, bub. I will be happy to take the word of a credentialled tax prepared/accountant with decades of experience rather than some rando who can't entirely spell properly online. It seems like Ozarker gets it, but keep posting gibberish.
 

zimm

Expedition Leader
Unless you feel like hiring a tax attorney while sitting in front of Mr. Audit man, the title date on a car had better be dec 31. I do not do accrued accounting, I am cash, therefore merely writing a check to MR dealer with a date of dec 31, and it not being cashed, with a title saying jan 2, is a risk. Other than the date on an uncashed check there would be no proof I had the truck, and unless one is willing to fight the IRS, in a non trial audit, you are guilty until proven innocent, and due to actually being guilty in that scenario it's not going to end well. Cars go thru the state dot etc, and are NOT farm equipment, and there's really no way or incentive for a dealer to participate in fraud that cannot be papered over.

Besides, who the hell wants to end up on the IRS shitlist for 20000oo bucks? I mean, If I'm doing fraud and ruining my reputation, it's gonna be retirement level sit on an island knee deep in hookers and blow fraud, not a frigging truck.
 

zimm

Expedition Leader
as a side note, the dealer offered me a different truck. two silvers, a black, and mushroom were "unclaimed" already.

none was set up as I would have liked, and quite frankly, boring an ugly.

But this does tell me there are a bit of people bailing, and maybe there will be deals done after the initial buyers get their rigs. I don't think this little bit of data is enough to declare a major issue for Ineos's pricing, their target market, and an economy just coming out of inflation, but, if one makes a "good column" for news, and a "bad" column for news, 4 trucks on the lot already in one month at one dealer is not in the column labled good news.
 

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