2013 tax changes
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Hi,
I can only suggest that you read IRS Publication 544, Sales and Disposition of Assets, it will give you a much better explanation than I can of it being taxable either as Ordinary Income, or a Capital Gain. the capital gain tax rate is a little less percentage point then you total income depending on what bracket you would be in.
If this farm tractor was in any way deducted as a depreciable asset use as farm equipment within the last 10 years, it would be a capital gain,
It would be ordinary Income and entered on line 21 as Other Income on the net profit only,
Which you take the total cost of what it was to restore deducted from the selling price.
you are taxed on the total income not just the sale, they are added together, and depending on where you are in the income bracket would be starting at 15%, to $35,300.00 gross , $35,350 to 85,650. if 25% Taxable income. but you have to remember that your income is subject to standard deductions, or itemized deductions that you are allowed.
So if your income is 39,500.00 it works out like this
Adjusted gross income $39,500.
Standard Deductions - 9,750. Single and personal Exemption
Your taxable Income is 29,750.00
Your tax rate is 15% your tax is $4,463.00 plus if you are self employed, you will pay 15.3% on the profit added to this figure.
The any tax withheld from wages, or retirements will be deducted from the amount owed
Frank’s Tax andBusiness Service
120 York RD Kings Mountain, NC28086-3151
(704) 739-4039 Fax: (704) 739-3934
e-mail: [email protected]
Web Site: Http://www.prep.1040.com/frankstax
Where you can "File Your Return Online"
Franklin Katz, ATP, PA, PB,
Providing Professional Accounting, Bookkeeping, Payroll and Income TaxPreparation Services
*Circular 230 Disclaimer: To ensure compliance with Treasury Regulationsgoverning written tax advice, please be advised that any tax advice included inthis communication, including attachments, is not intended, and cannot be used,for the purpose of (i) avoiding any federal tax penalty or (ii) promoting,marketing, or recommending any transaction or matter to another person.
Confidentially Notice: This email message is Ifyou have receivedthis message in error and are not the intended addressee, please advise thesender by reply email and delete this message immediately.
*The IRS doesnot endorse any particular individual tax preparer. For more information on taxreturn preparers go to IRS.gov
I can only suggest that you read IRS Publication 544, Sales and Disposition of Assets, it will give you a much better explanation than I can of it being taxable either as Ordinary Income, or a Capital Gain. the capital gain tax rate is a little less percentage point then you total income depending on what bracket you would be in.
If this farm tractor was in any way deducted as a depreciable asset use as farm equipment within the last 10 years, it would be a capital gain,
It would be ordinary Income and entered on line 21 as Other Income on the net profit only,
Which you take the total cost of what it was to restore deducted from the selling price.
you are taxed on the total income not just the sale, they are added together, and depending on where you are in the income bracket would be starting at 15%, to $35,300.00 gross , $35,350 to 85,650. if 25% Taxable income. but you have to remember that your income is subject to standard deductions, or itemized deductions that you are allowed.
So if your income is 39,500.00 it works out like this
Adjusted gross income $39,500.
Standard Deductions - 9,750. Single and personal Exemption
Your taxable Income is 29,750.00
Your tax rate is 15% your tax is $4,463.00 plus if you are self employed, you will pay 15.3% on the profit added to this figure.
The any tax withheld from wages, or retirements will be deducted from the amount owed
Frank’s Tax andBusiness Service
120 York RD Kings Mountain, NC28086-3151
(704) 739-4039 Fax: (704) 739-3934
e-mail: [email protected]
Web Site: Http://www.prep.1040.com/frankstax
Where you can "File Your Return Online"
Franklin Katz, ATP, PA, PB,
Providing Professional Accounting, Bookkeeping, Payroll and Income TaxPreparation Services
*Circular 230 Disclaimer: To ensure compliance with Treasury Regulationsgoverning written tax advice, please be advised that any tax advice included inthis communication, including attachments, is not intended, and cannot be used,for the purpose of (i) avoiding any federal tax penalty or (ii) promoting,marketing, or recommending any transaction or matter to another person.
Confidentially Notice: This email message is Ifyou have receivedthis message in error and are not the intended addressee, please advise thesender by reply email and delete this message immediately.
*The IRS doesnot endorse any particular individual tax preparer. For more information on taxreturn preparers go to IRS.gov
Thank you Frank. That was good info. I asked my cpa to read this and he agreed. Now I'm looking at another tractor, the '59 ford 861:
Ford 861 tractor for sale
Webbly, I do not know where you are getting your information from, but what you are saying to do it totally Illegal, Here is the problem, if you put anything into a personal account and your audited GUESS WHAT, THEY GOT YOU DEAD IN THE WATER. WHEN THE WANT TO SEE THE BUSINESS PART FIRST ANDTHEN YOUR PERSONAL ACCOUNT, AND WOULD WANT TO KNOW WHERE THE $$$$$$$$$$$$$$ CAME FROM AND IT WOULD BE TAXABLE INCOME, AND REPORTABLE ON YOUR TAX RETURN ON LINE 21 OTHER INCOME. Sorry for being blunt, but I have had a truck driver audit in my office and they picked up a $5000.00 personal deposit into his account, they questioned it and wanted proof of who paid it. it was later not figured due to an insurance claim reimbursement to replace his roof at his house. So watch what your claiming or leaving off of your tax return, and be as honest as possible, cause if you put in numbers that do not figure in you deduction they will red Flag it and then you have to prove the deduction and it will definitely be disallowed. I understand where most of you are coming from and do not want to pay any taxes to anyone, but if you deduct to much on one line, they will question it. especially truck repair, truck repair are broken down in to cateorgies Major, regular, and minor. major repairs, Engine, transmission, Rear End, must be depreciated over a period of 5 years, at straight line depreciated or admoritizied over the same period. due to it revitalizes the equipment . you cannot take a 179 or total expense in the year of repair.[h=1]Franklin Katz, ATP, PA, PB[/h][h=1]Frank's Tax & Business Service[/h][h=1]315 E. King St.[/h][h=1]Kings Mountain, NC 28086[/h][h=1]704-739-4039 [/h][h=1]E-Mail: [email protected])[/h][h=1]Web: www.prep.1040.com/frankstax[/h][h=1]
Circular 230Disclaimer[/h]Circular230: To ensure compliance with the requirements imposed by the IRS, we inform you that any tax advicecontained in our communication (including any attachments) was not intended orwritten to be used, and cannot be used, for the purpose of (i) avoiding any taxpenalty or (ii) promoting, marketing or recommending to another party anytransaction or matter addressed herein.
Our advice in our communication is limited to the conclusions specifically setforth herein and is based on the completeness and accuracy of the facts andassumptions as stated. Our advice may consider tax authorities that are subjectto change, retroactively and/or prospectively. Such changes could affect thevalidity of our advice. Our advice will not be updated for subsequent changesor modifications to applicable law and regulations, or to the judicial andadministrative interpretations thereof.
Legally privileged and/or confidential information may be contained in ourcommunication; it is intended exclusively for the addressee. Opinions,conclusions and other information expressed in our communication are subject tothe terms and conditions expressed in the governing client engagement letter.If you are not the addressee (or designated representative) indicated in thismessage, you may not disclose, copy, or distribute this message to anyone.Action taken or omitted based on our communication is prohibited and may beunlawful.
Circular 230Disclaimer[/h]Circular230: To ensure compliance with the requirements imposed by the IRS, we inform you that any tax advicecontained in our communication (including any attachments) was not intended orwritten to be used, and cannot be used, for the purpose of (i) avoiding any taxpenalty or (ii) promoting, marketing or recommending to another party anytransaction or matter addressed herein.
Our advice in our communication is limited to the conclusions specifically setforth herein and is based on the completeness and accuracy of the facts andassumptions as stated. Our advice may consider tax authorities that are subjectto change, retroactively and/or prospectively. Such changes could affect thevalidity of our advice. Our advice will not be updated for subsequent changesor modifications to applicable law and regulations, or to the judicial andadministrative interpretations thereof.
Legally privileged and/or confidential information may be contained in ourcommunication; it is intended exclusively for the addressee. Opinions,conclusions and other information expressed in our communication are subject tothe terms and conditions expressed in the governing client engagement letter.If you are not the addressee (or designated representative) indicated in thismessage, you may not disclose, copy, or distribute this message to anyone.Action taken or omitted based on our communication is prohibited and may beunlawful.