Tax question / free hardware



  • 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?



  • Is the company you are working with a Non Profit?



  • Jurisdiction will be important for the context here.



  • 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.



  • If you are non-profit I think that it's tax free as a donation.



  • 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!



  • @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.



  • @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..



  • you should ask the legal dept
    paging @KOOLER or @Jason

    #flamesuit


  • Banned

    Ask your finance department, if you have an in house Controller/CPA



  • 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.



  • Oh and it's not like taking something to Canada either 😉 😛



  • @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.



  • @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?



  • @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.



  • @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.



  • @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.



  • @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 🙂



  • @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).



  • @TAHIN said in Tax question / free hardware:

    @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).

    Well, if you have no sales or use tax, then you probably don't have anything at all to worry about. What other kind of tax would you be subject to for accepting goods? Computers/servers/printers, and other typical IT related things aren't subject to property tax. I can't think of anything else you'd have to worry about.

    I suppose someone could try to claim capital gains taxes? meh?



  • Which is also why I had to google "use tax".

    Ignorance sure is bliss!



  • @Dashrender said in Tax question / free hardware:

    @TAHIN said in Tax question / free hardware:

    @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).

    Well, if you have no sales or use tax, then you probably don't have anything at all to worry about. What other kind of tax would you be subject to for accepting goods? Computers/servers/printers, and other typical IT related things aren't subject to property tax. I can't think of anything else you'd have to worry about.

    I suppose someone could try to claim capital gains taxes? meh?

    Any states not have those?



  • @scottalanmiller said in Tax question / free hardware:

    @Dashrender said in Tax question / free hardware:

    @TAHIN said in Tax question / free hardware:

    @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).

    Well, if you have no sales or use tax, then you probably don't have anything at all to worry about. What other kind of tax would you be subject to for accepting goods? Computers/servers/printers, and other typical IT related things aren't subject to property tax. I can't think of anything else you'd have to worry about.

    I suppose someone could try to claim capital gains taxes? meh?

    Any states not have those?

    Not have what? Capital gains? I have no idea - but I'm not sure that capital gains count on sold goods that aren't the aforementioned home/building/vehicle.


  • Banned

    @Dashrender said in Tax question / free hardware:

    @TAHIN said in Tax question / free hardware:

    @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).

    Well, if you have no sales or use tax, then you probably don't have anything at all to worry about. What other kind of tax would you be subject to for accepting goods? Computers/servers/printers, and other typical IT related things aren't subject to property tax. I can't think of anything else you'd have to worry about.

    I suppose someone could try to claim capital gains taxes? meh?

    Actually they are subject to property tax as well as depreciation credits. With business all physical assets are taxable.



  • @Jason said in Tax question / free hardware:

    @Dashrender said in Tax question / free hardware:

    @TAHIN said in Tax question / free hardware:

    @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).

    Well, if you have no sales or use tax, then you probably don't have anything at all to worry about. What other kind of tax would you be subject to for accepting goods? Computers/servers/printers, and other typical IT related things aren't subject to property tax. I can't think of anything else you'd have to worry about.

    I suppose someone could try to claim capital gains taxes? meh?

    Actually they are subject to property tax as well as depreciation credits

    Really? At what level do you have to pay property tax on IT equipment? I had 10K+ of server equipment in my house for years when I had my own business. My tax accountant knew full well about it and never once mentioned anything about property taxes on that equipment.

    I'm pretty sure we don't pay property tax on car either, we pay sales of course, then Road and whatever other taxes are put on by your local municipality.



  • @Jason said in Tax question / free hardware:

    depreciation credits. With business all physical assets are taxable.

    Now sure, you get depreciation credits, but that's based on what you paid (for goods). I.E. I buy a server for $5K, I get to depreciate that over 5-8 years. But if that server is given to me - what would I be depreciating against? Even better, I pay $100 for it, pretty sure I don't get to take depreciation against $5000, but I could be wrong.


  • Banned

    Depreciation is based on assested value not just purchase price. Donated assets are depreciated just the same



  • What if the asset is treated like a "demo unit" that we will have until it's fully depreciated, at which point the vendor writes it off?



  • @Dashrender said in Tax question / free hardware:

    @Jason said in Tax question / free hardware:

    depreciation credits. With business all physical assets are taxable.

    Now sure, you get depreciation credits, but that's based on what you paid (for goods). I.E. I buy a server for $5K, I get to depreciate that over 5-8 years. But if that server is given to me - what would I be depreciating against? Even better, I pay $100 for it, pretty sure I don't get to take depreciation against $5000, but I could be wrong.

    If you pay $100 to try to make something not a gift that was really a gift that's called tax fraud 😉


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