Tax question / free hardware
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I've very recently come into a situation where my company is able to receive a lot of free equipment (over the amount to be untaxed -10k in most states?), and I need some advice. Can someone who is experienced with large hardware acquisitions and tax laws PM me?
Thanks!!
Happy monday! -
Before we go into the legality of tax laws and potential tax evasion; let's start with what state / country are you in? What type of business do you work for currently?
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Is the company you are working with a Non Profit?
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Jurisdiction will be important for the context here.
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He's in the US.
The company providing the servers is also in the US, and the equipment would be crossing state lines. So with that information I would call a property accountant and have them run the numbers for the tax fees that will be assessed.
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If you are non-profit I think that it's tax free as a donation.
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It's not non-profit unfortunately. Private company. I've been chatting with Dustin and I think he's right in that some professional consulting may be in order. Any sort of avoidance seems pretty risky. Thanks for your help!
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@TAHIN said in Tax question / free hardware:
It's not non-profit unfortunately. Private company. I've been chatting with Dustin and I think he's right in that some professional consulting may be in order. Any sort of avoidance seems pretty risky. Thanks for your help!
Yes, likely a CPA is needed here.
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@TAHIN said in Tax question / free hardware:
It's not non-profit unfortunately. Private company. I've been chatting with Dustin and I think he's right in that some professional consulting may be in order. Any sort of avoidance seems pretty risky. Thanks for your help!
shivers
Yes - A CPA or such will be needed..
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Ask your finance department, if you have an in house Controller/CPA
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Why have them donate it. Have them sell the equipment for $1 each. It's not like a house or car where you have to pay property taxes.
Paying the $1 and the tax bill on $1 will probably be substantially less than paying a tax accountant.
though I suppose you could investigate paying $1 for the whole lot.
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Oh and it's not like taking something to Canada either
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@Dashrender said in Tax question / free hardware:
Why have them donate it. Have them sell the equipment for $1 each. It's not like a house or car where you have to pay property taxes.
Paying the $1 and the tax bill on $1 will probably be substantially less than paying a tax accountant.
though I suppose you could investigate paying $1 for the whole lot.
That doesn't necessarily get you past use taxes on their value.
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@brianlittlejohn said in Tax question / free hardware:
@Dashrender said in Tax question / free hardware:
Why have them donate it. Have them sell the equipment for $1 each. It's not like a house or car where you have to pay property taxes.
Paying the $1 and the tax bill on $1 will probably be substantially less than paying a tax accountant.
though I suppose you could investigate paying $1 for the whole lot.
That doesn't necessarily get you past use taxes on their value.
Is there some new thing I'm unaware of? Aren't typical purchased goods (I'm specifically excluding houses/buildings and vehicles) taxes within the US at the sales rate, regardless of value? I suppose there could be an actual value limitation on this, but I've never heard of it. Is there one?
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@Dashrender said in Tax question / free hardware:
@brianlittlejohn said in Tax question / free hardware:
@Dashrender said in Tax question / free hardware:
Why have them donate it. Have them sell the equipment for $1 each. It's not like a house or car where you have to pay property taxes.
Paying the $1 and the tax bill on $1 will probably be substantially less than paying a tax accountant.
though I suppose you could investigate paying $1 for the whole lot.
That doesn't necessarily get you past use taxes on their value.
Is there some new thing I'm unaware of? Aren't typical purchased goods (I'm specifically excluding houses/buildings and vehicles) taxes within the US at the sales rate, regardless of value? I suppose there could be an actual value limitation on this, but I've never heard of it. Is there one?
These aren't purchased goods, these are gifts.
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@Dashrender said in Tax question / free hardware:
@brianlittlejohn said in Tax question / free hardware:
@Dashrender said in Tax question / free hardware:
Why have them donate it. Have them sell the equipment for $1 each. It's not like a house or car where you have to pay property taxes.
Paying the $1 and the tax bill on $1 will probably be substantially less than paying a tax accountant.
though I suppose you could investigate paying $1 for the whole lot.
That doesn't necessarily get you past use taxes on their value.
Is there some new thing I'm unaware of? Aren't typical purchased goods (I'm specifically excluding houses/buildings and vehicles) taxes within the US at the sales rate, regardless of value? I suppose there could be an actual value limitation on this, but I've never heard of it. Is there one?
You are not familiar with use taxes? That's what you owe when you didn't pay sales tax on something.
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@scottalanmiller said in Tax question / free hardware:
@Dashrender said in Tax question / free hardware:
@brianlittlejohn said in Tax question / free hardware:
@Dashrender said in Tax question / free hardware:
Why have them donate it. Have them sell the equipment for $1 each. It's not like a house or car where you have to pay property taxes.
Paying the $1 and the tax bill on $1 will probably be substantially less than paying a tax accountant.
though I suppose you could investigate paying $1 for the whole lot.
That doesn't necessarily get you past use taxes on their value.
Is there some new thing I'm unaware of? Aren't typical purchased goods (I'm specifically excluding houses/buildings and vehicles) taxes within the US at the sales rate, regardless of value? I suppose there could be an actual value limitation on this, but I've never heard of it. Is there one?
These aren't purchased goods, these are gifts.
If you look at the quoted items I suggested that the OP not accept a gift, instead to pay for them. Then the value becomes what you paid - unless there is tax code for non home/building/vehicle items at a specific value being sold for less than current value that would then make you have to pay taxes on the current actual value.
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@scottalanmiller said in Tax question / free hardware:
@Dashrender said in Tax question / free hardware:
@brianlittlejohn said in Tax question / free hardware:
@Dashrender said in Tax question / free hardware:
Why have them donate it. Have them sell the equipment for $1 each. It's not like a house or car where you have to pay property taxes.
Paying the $1 and the tax bill on $1 will probably be substantially less than paying a tax accountant.
though I suppose you could investigate paying $1 for the whole lot.
That doesn't necessarily get you past use taxes on their value.
Is there some new thing I'm unaware of? Aren't typical purchased goods (I'm specifically excluding houses/buildings and vehicles) taxes within the US at the sales rate, regardless of value? I suppose there could be an actual value limitation on this, but I've never heard of it. Is there one?
You are not familiar with use taxes? That's what you owe when you didn't pay sales tax on something.
See my other post
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@scottalanmiller said in Tax question / free hardware:
You are not familiar with use taxes? That's what you owe when you didn't pay sales tax on something.
"The use tax imposes a compensating tax equal in amount to the sales tax that would have been imposed on the sale of the property, if the sale had occurred within the state's taxing jurisdiction."
I thought use tax was imposed according to the state in which the product is being consumed. There's no sales tax in Montana, and therefore no use tax either. There is a small clause for sales and use tax, but that is limited to campgrounds/tourist stuff (go us lol).
