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Hi, I classified the purchase of laptops as a capital expense. I think it should be an asset instead. Please which is right. Does it have to depend on the price?

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Level 1
 
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Level 1
I barely understand it. Why are tax matters never straight forward
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Level 15
Where would the fun be in that?

ex-AllStar
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Level 15

Tax speak, laptops are not capital assets.  §1221(a)(2) specifically excludes "property, used in his trade or business, of a character which is subject to the allowance for depreciation provided in section 167, or real property used in his trade or business" from the definition of capital asset.

Computer hardware is a §1245 property and the cost of which is a capital expenditure subject to §263(a).

Price is irrelevant to these considerations.

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Still an AllStar
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Level 1
Guess am on track
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