topic Equipment purchase and deduction for new business in Deductions & credits

Equipment purchase and deduction for new business

jtandrew — Thu, 31 Dec 2020 22:25:07 GMT

Hi all,

I am starting a business using a Glowforge laser cutter. I have purchased the equipment but have not done any business yet. I will be starting selling goods in 2021.

Will I be able to deduct the cost on my 2021 taxes even though purchased in 2020?

Thanks,

Re: Equipment purchase and deduction for new business

Anonymous_ — Thu, 31 Dec 2020 22:44:54 GMT

@jtandrew wrote:
Will I be able to deduct the cost on my 2021 taxes even though purchased in 2020?

At such time as you are open for business and have placed the asset in service, you can begin cost recovery of the cutter, either through depreciation deductions, a Section 179 deduction, or bonus depreciation, as the case may be.

Regardless, all of the foregoing will start in the 2021 tax year, assuming the asset is placed in service in 2021.

Re: Equipment purchase and deduction for new business

jtandrew — Fri, 01 Jan 2021 21:16:16 GMT

Thanks for the insight!