Contributing personal equipment to photography business?

[phenom_1819]

I've done several searches with no luck...

I've recently started a photography business. I've acquired a significant amount of gear personally that I want to contribute to the business for tax purposes. Can anybody share information about how to go about doing this? How is the value quantified -- price paid or current used value? Any documentation necessary?

Thank you in advance!

[airfrogusmc]

I've done several searches with no luck...

I've recently started a photography business. I've acquired a significant amount of gear personally that I want to contribute to the business for tax purposes. Can anybody share information about how to go about doing this? How is the value quantified -- price paid or current used value? Any documentation necessary?

Thank you in advance!

Talk to your accountant. ;)

[phenom_1819]

I knew that was coming. ;)

I have talked with my accountant... I'm married to her. She wants me to find the answers for myself... because she thinks I rely too much on her for tax-related info (she's the accountant, right??). Don't worry, she won't let me move forward with the wrong answers. I just need to take a stab at finding them myself, first. :)

[airfrogusmc]

I knew that was coming. ;)

I have talked with my accountant... I'm married to her. She wants me to find the answers for myself... because she thinks I rely too much on her for tax-related info (she's the accountant, right??). Don't worry, she won't let me move forward with the wrong answers. I just need to take a stab at finding them myself, first. :)

Well you should use her advise, its what she does. I wouldn't trust anyone but my accountant with serious tax advice when it comes to my business. I'm a photographer. My accountant would come to me for photography because I'm better at it than she is. Shes better at money matters than I am.

[jacuff]

Seriously, I wouldn't want to take advice from some stranger on the internet unless I knew I could verify that it was correct.

Someone may tell you that unless you acquired it in 2009 after you went into business, you won't be able to fully deduct it.
Others might say that you have to have written evidence that the equipment has been used for more than 50% business use in order to deduct it.
Still others might tell you that for equipment acquired before 2009, you can minimally deduct it over 5 years if it is used for more than 50% business purposes.

But the one thing most everyone can agree on is talk to your CPA... they actually know this stuff.

[phenom_1819]

Thanks jacuff, that is very helpful! Airfrogusmc, I do plan to work with my accountant on this. Like I said, I'm married to her. She just wants me to try and find some direction myself without completely relying on her to tell me what to do. Believe me, it is in both her and my best interest to be sure everything is done correctly -- and it will be.

I've been doing lots of reading on the IRS website too. If anybody knows of any links with good info about, that would be helpful too.

Thank you!

[KrautFed]

I've been reading the IRS website with this in mind as well. Cal, are you Sole Prop, LLC, LLP, or INC (and which INC)?

[freaking102]

buy a book on how to start/run a business. lots of them out there, and don't cost much.

[spkerer]

Airfrogusmc, I do plan to work with my accountant on this. Like I said, I'm married to her. She just wants me to try and find some direction myself without completely relying on her to tell me what to do.

Then ask her to recommend another accountant because you think an accountant is the most reliable source for this tax advice.

[wyofizz]

Go see another accountant & see how she likes the check you wrote for it.

[dche5390]

Never sleep with your accountant ... wait. Hmm ...

Until I'm well established, I think I'll have a three core lenses and two bodies at most, and everything else will be hired on a needs-basis.

Tax ... confuddles me greatly.

[J Michael]

Run this by your wife: your business purchases the equipment from you by writing you a check on the business checking account. Your business then elects to deduct the entire purchase price in the tax year in which your company purchased the equipment per accelerated depreciation rules.

I'm not an accountant and don't pretend to understand tax forms. :)

[TheBrick3]

If you give you're equipment to your business and it goes bankrupt, you no longer have any equipment. But I wouldn't let that stop you. I'm only in Accounting II, but it's fairly standard to give junk to your business when it starts. Knowing how much to deduct, as mentioned earlier in this thread, is a different matter.

[LONDON808]

Tbh you would be better off not transferingbownership to the company but rather renting it from yourself -

[phenom_1819]

Thanks guys, for all the info so far. London, can you do that? I think I've read on here that it opens up a whole can of IRS worms...

[TheBrick3]

Renting it probably wouldn't provide enough benefit, unless you were somehow able to charge an insane rate. Even at a normal rate, I'm sure there would be enough oversight that it would be a prohibitive annoyance.