63 votes

Do rental car agencies sell their cars at a time when it is risky for the purchaser?

My mother worked for one of the major American car rental companies. She talked about this topic with me and my answer will summarize the talk. Does the fact that they sell the car mean during this ...
Lan's user avatar
  • 2,680
45 votes

Do rental car agencies sell their cars at a time when it is risky for the purchaser?

Many Web sites and articles warn against buying former rental cars, because people renting these cars often mistreat them. Rental cars are typically driven by people over 25, these are typically ...
Hart CO's user avatar
  • 70.4k
36 votes

How do you calculate the depreciation on a car?

Car is worth what people are willing to pay for it. While you're calculating depreciation for accounting purposes, that's not how real world supply and demand market price setting works. The car may ...
littleadv's user avatar
  • 172k
34 votes
Accepted

Is money from the sale of an asset considered income?

Yes. What you describe is similar to those who buy a rental property, take depreciation, and then sell it. (With no replacement 1030 exchange, etc). As a consumer, I buy a car, and sell it for a lower ...
JTP - Apologise to Monica's user avatar
28 votes
Accepted

How should I value personal use television for donation?

IRS Pub 561 says you have to use fair market value. You cannot simply use a depreciated value. You should attempt to determine what people normally pay for comparable items, and be prepared to ...
Nate Eldredge's user avatar
27 votes
Accepted

What can be done to mitigate rental income tax liability once depreciation is fully exhausted?

Several comments first: If rent is $X/month and all in mortgage is also $X/month, it would suck to need to pay income tax on $X x 12 for the year, when it all went towards paying the mortgage This ...
littleadv's user avatar
  • 172k
19 votes

Do rental car agencies sell their cars at a time when it is risky for the purchaser?

Many Web sites and articles warn against buying former rental cars, because people renting these cars often mistreat them. Many of those are also written by unqualified individuals for publication on ...
Ivan's user avatar
  • 1,171
19 votes

If a home has increased in value, why would an essential component of the home depreciate?

Insurance companies pay for the cost of unexpected events not for the cost to maintain your house. Without any unexpected events, you need to replace your roof about every 20 years and insurance won't ...
minou's user avatar
  • 7,516
19 votes

How do you calculate the depreciation on a car?

The way I quantify depreciation is to look at how age affects current prices. If one examines online car marketplaces, such as ebay, craigslist and more UK specific such as autotrader one can see how ...
User65535's user avatar
  • 440
16 votes

How should I value personal use television for donation?

The usual lazy recommendation: See what similar objects, in similar condition, of similar age, have sold for recently on eBay. That establishes a fair market value by directly polling the market.
keshlam's user avatar
  • 45.1k
14 votes

Is it true that rental income may end up not taxable in USA?

If you had no expenses related to the property as the owner of a rental property: no interest payment on the mortgage, no real estate tax, no condo fee or HOA fee, and no insurance, and no utilities; ...
mhoran_psprep's user avatar
13 votes
Accepted

Time, money and probability: Should i sell my electric bike

Electric bikes are a newish thing, and with it you can expect technology to improve. Considering that, the tech in your current bike, even if new might be considered antiquated in 3 to 5 years. ...
Pete B.'s user avatar
  • 76.3k
12 votes

If a home has increased in value, why would an essential component of the home depreciate?

These values are completely disconnected You say "price of a house" but that's wrong. The sale price is the value of house + the land it is on. Shockingly often, the value of the house ...
Harper - Reinstate Monica's user avatar
10 votes
Accepted

Is it common for a new car of about $16k to be worth only $4-6k after three years?

It depends completely on the car. Some cars retain their value much better, and others drop in value like a rock (no pun intended). The mileage and condition on a car also has a huge impact on value....
D Stanley's user avatar
  • 133k
9 votes
Accepted

All up front rental payments impacting taxes?

This is not entirely how it works, but it can cause some temporary cash-flow problems due to taxes shifting. When you're paid for a whole year at once, you as a cash basis taxpayer recognize the ...
littleadv's user avatar
  • 172k
6 votes

Do rental car agencies sell their cars at a time when it is risky for the purchaser?

I've been told by staff in my local car hire agency that they get such big discounts that they actually make money selling the cars, so they replace all their cars every six months (in the UK the ...
thelem's user avatar
  • 1,464
6 votes
Accepted

How does depreciation affect real estate capital gains tax in Ontario?

In Canada, you have the option of claiming depreciation expense, called capital cost allowance (CCA), it is not required. At time of sale, any CCA that you have claimed is recaptured and taxed as ...
Hart CO's user avatar
  • 70.4k
6 votes

How should I value personal use television for donation?

Is it a tube television, digital, analog, what? Tube televisions are no longer made in (or imported to) the U.S., and if it's an analog set then it would require a digital converter just for anyone ...
Daniel Anderson's user avatar
6 votes

Is it true that rental income may end up not taxable in USA?

You've pretty much nailed it conceptually, but you are implying something which I think should be explicitly called out: Plus if we actually pay 20% to 50% down payment, and if the mortgage interest ...
TTT's user avatar
  • 47.2k
5 votes
Accepted

Can you depreciate real estate that has previously been fully depreciated?

By asking about 39 years, I assume you mean a commercial property, as residential is 27.5. Yes, the depreciation starts when you buy it, the history doesn't matter. It's as plain as that.
JTP - Apologise to Monica's user avatar
5 votes
Accepted

Off-the-shelf Computer Software Depreciation

In contracting Non-off-the-shelf software is software that has been modified or developed for you. Microsoft office is off the shelf. Paying a company to develop an add-on to MS office would not be ...
mhoran_psprep's user avatar
5 votes

Is money from the sale of an asset considered income?

As with all tax information from the Internet, you should verify this with your accountant and/or tax professional. If you have neither, call the IRS and ask; they are not evil monsters. The JTP ...
DwB's user avatar
  • 159
5 votes
Accepted

What should I take into account when deciding whether I should sell my car?

It's really impossible to answer without knowing what you intend to do. You could sell the car, paying off the balance of the loan, and have $11,900. If you don't need another car, you have that ...
jamesqf's user avatar
  • 11.1k
5 votes

If a home has increased in value, why would an essential component of the home depreciate?

Typically much of the appreciation in a house is just the appreciation of the land on which the house sits. The value of your parents roof is steadily decreasing with age, but the increase in the ...
Charles E. Grant's user avatar
5 votes

Understanding Car Rental Tax Deductions

Rental activities are passive, unless you materially participate in them. The definition of "materially participate" is given in the IRS Publication 925: You participated in the activity ...
littleadv's user avatar
  • 172k
4 votes
Accepted

IRS Useful Life of a Laptop Computer

You are right that computers are depreciated over 5 years. You would normally use MACRS GDS (5 year 200% declining balance) to depreciate. ADS is another option, but as you might have already seen, ...
d_dd's user avatar
  • 379
4 votes
Accepted

What is the risk involved in buying a used car vs new?

There are several distinctions that need to be made in order to properly address this question. For one the make and model needs to be considered. Each such make and model have different rates of ...
Pete B.'s user avatar
  • 76.3k
4 votes

Time, money and probability: Should i sell my electric bike

What you paid for it isn't relevant. All that matters is what you can get for it if you sell now, and how much it will cost you to purchase a similar bike in the future. For this item, it is almost ...
TTT's user avatar
  • 47.2k
4 votes
Accepted

How does depreciation deduction work in mortgages?

How does depreciation deduction work in mortgages? Generally - not at all? Why should it? Depreciation is a tax element based on purchase price. Mortgage is a credit based on outstanding balance. ...
TomTom's user avatar
  • 11.6k
4 votes
Accepted

How to depreciate in terms of taxes?

With vehicle expenses for business you can opt to take actual expenses or a standardized rate per mile (currently $0.58/mile). If you take actual expenses, you'd typically depreciate the vehicle cost ...
Hart CO's user avatar
  • 70.4k

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