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What is the best way to handle new equipment purchases?

Ann W
Level 1

I was wondering if you could give me your opinion on how to handle our year-end.

Our year-end profit before my questions is $172,570.  This number includes our interest expense of $1,315,298 and we will be hit with the interest expense limitation because of our prior sales.

I am not sure what the best way to handle $903,980 of warehouse equipment that we built to manufacture a new product.  Should I take the bonus depreciation?  Should I take Section 179 depreciation?

How would you suggest I handle this?  My net income number does not include anything with the new warehouse equipment.  We are a S Corporation.



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2 Replies 2
Level 15

My opinion ---------------- sit down with a competent tax professional to give you the proper help that you need.

ACME Taxes, Tatoos, Tires and Turtles (I've expanded my line of products to better serve you)
Level 15

Your interest expense indicates some significant debt. Your year end profit isn't very much by comparison to your debt, which gives some indication that you have some significant activity. Additionally, you have invested a large amount into some equipment, intending (one presumes) to make some sort of significant change to the bottom line.

None of which can be examined by people on the internet, to know what your best planning options would be.

Manufacturing and production isn't the same as asking for help with a Tax or Accounting practice.

"Level Up" is a gaming function, not a real life function.