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.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?
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.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.
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.What is this tax issue? Is it some sort of EU VAT change?
You can claim ownership and possession with title, you hold title after payment has been made.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.
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.
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!
lol you're wrong all over the place todayJorge,
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!