Comment by jgalt212

Comment by jgalt212 8 days ago

As a business owner, I've been adversely impacted by this. I still can't wrap my head around how this is legal or sustainable. If I buy $1MM of plant and equipment, I may not be able to expense it all in year 1, but I can relatively easily get a loan to finance the purchase of such--and manage my cashflows. The same is not for devs. I cannot easily get a loan for $1MM in dev salaries. In my own case, I don't need the loan to pay the salaries. I need the loan to pay the taxes for the portion of the salaries I cannot deduct as an expense. It's just insane.

thaumasiotes 8 days ago

Question: say you buy the equipment personally and then rent it to your business. What does the tax treatment look like?

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projektfu 7 days ago

A common arrangement is for a closely held corporation to rent its space from another corporation or LLC held by the same owner. This allows the asset to be protected from liability as well as simplifying accounting by splitting it into two businesses, the core business and the real-estate business. Tax-wise, it's a wash, if the income passes through to the same owners.

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jgalt212 8 days ago

If the company is a pass through entity, I'm pretty sure this nets out to zero. I don't know how this nets out under a C corp.

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