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slowest summer in our 20 years.

My work has kept pretty steady, mostly because my biggest customer is quite busy. My other customers seem somewhat slow. It averages out to me having a nice amount of work. I can't complain.
 
The 3rd quarter was absolute crap. The start of the 4th was too.
(Three months of crickets turned what should have been a great year, into barely breaking what we did in '22.)

Everything changed in the beginning of November.
PO's came flying in one after the other.
Then the 'gotta have it in a week' requests started on 11/17.
If we were going to mess with Thanksgiving, they had to make it worth our time/ overtime.
They did.
Today we have work through the end of the year, but nothing much booked in Q1 2024.

Cheers!
We were roughly the same. End of last week... ding ding ding the stuff all rolled in. Still not happy since the drop over the last few months are going to take a while to get replenished
 
Year-end is a weird time to gauge businesses. In the US, the first of the year is when businesses take inventory to pay for their taxable property. Even thrift stores stop taking donations, discount things and generally try to thin out as much as possible so they can reduce that taxable inventory in January.

Flip side: corporations sit on their budgets all year, not sure they should spend. As year-end approaches, they realize they're running out of time to fill orders and need to flush that cash on virtually any capital asset item purchase they could find.

One year we went to a local shop with something like $25K to spend on a scale display model and three weeks to do it. I had to supply the designs and some of the parts, and work with them to get it done. We were down to the wire with the buyers driving over the last working day before Christmas to "inspect it" before cutting the check. A coat of paint was sprayed so it was literally wet when they arrived. That kept anyone from touching it and it seemed reasonable that it would be "delivered" when the paint dried. I had to promise I'd have it moved into our building the week between Christmas and NYE. To be tax legal, it had to be delivered.

I took delivery, sent a snapshot of it around to everyone to show it was on-dock. January 2nd or 3rd. I drove it back for "warranty repairs" for some "details that were missed". The money changed hands and it was delivered the same year. No money was paid for the "warranty" work. It honestly amounted to a few small paint and decal additions.

Every year was similar antics trying to find someone to spend our capital asset budgets with. If you have any customers with deep pockets, it wouldn't hurt to call around and ask if there's anything they need done before Christmas to get under the tax deadline.
 
The local machine tool dealers all tell me of customers that dragged their feet only to scramble to buy a CNC before year's end.
Happens like clockwork.
If we had that sort of Section 179 tax deduction in Canada I'd buy a new machine right now even if I don't have much use for it. Sadly no such benefits around here, so just gonna get screwed on taxes as usual.
 
If we had that sort of Section 179 tax deduction in Canada I'd buy a new machine right now even if I don't have much use for it. Sadly no such benefits around here, so just gonna get screwed on taxes as usual.

Shirley you still get to deduct it over X years?


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I am Ox and I approve this post!
 
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If we had that sort of Section 179 tax deduction in Canada I'd buy a new machine right now even if I don't have much use for it. Sadly no such benefits around here, so just gonna get screwed on taxes as usual.
Im finding out the hard way that these deductions arent what they are cracked up to be. I bought a used machine for $80,000 in 2018. Due to sec 179 and depreciation, it has been fully depreciated now. It has held its value well, and others of the same make, year and model are selling for around $80,000 now. ( well, they are listed for $80k anyway )

So my CPA told me if I do sell it for $80k, since it has been fully depreciated I will owe $28k in taxes for depreciation recapture.
Guess I should have bought crappier machines that lose value quickly. Maybe I should have gone with Haas afterall.....
 
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Im finding out the hard way that these deductions arent what they are cracked up to be. I bought a used machine for $80,000 in 2018. Due to sec 179 and depreciation, it has been fully depreciated now. It has held its value well, and others of the same make, year and model are selling for around $80,000 now. ( well, they are listed for $80k anyway )

So my CPA told me if I do sell it for $80k, since it has been fully depreciated I will owe $28k in taxes for depreciation recapture.
Guess I should have bought crappier machines that lose value quickly. Maybe I should have gone with Haas afterall.....
How can you write of the depreciation value if the machine doesnt depreciate? I understand the tax law allowing for the machines depreciation to be written off all in the first year, but wouldnt you know the depreciated value when filing your taxes?

It doesnt make sense to depreciate a piece of equipment that hasnt lost any value yet.
 
If we had that sort of Section 179 tax deduction in Canada I'd buy a new machine right now even if I don't have much use for it. Sadly no such benefits around here, so just gonna get screwed on taxes as usual.
WOWOWOWOOWW!!!!
WE DO UNTIL JAN 1st!!!!!!!

Dude fire your accountant for not telling you!
Federal accelerated equipment incentive. This year only. Needs to be delivered and in service before jan1st. 2024
100% equipment write down. No minimum ownership period
(The typical 6minths is waved)

It’s a program for all businesses and all equipment.
Need a dishwasher. Good
Eye exam scanner, good
Tool box, good
Lathe, good.

Here’s the link to federal governments page about the program

 
How can you write of the depreciation value if the machine doesnt depreciate? I understand the tax law allowing for the machines depreciation to be written off all in the first year, but wouldnt you know the depreciated value when filing your taxes?

It doesnt make sense to depreciate a piece of equipment that hasnt lost any value yet.
You get a choice of writing it off the first year, or spread out over multiple years. Standard is straight line, five years. Lots of companies use that method. You should be using it, even if you buy used equipment. If it changed hands, it's a new asset and you can depreciate it.

The snag is that even though you can depreciate it, it's now a taxable asset of the business and they will estimate its value each year and tax you on the fact that you own it.

It sounds like you're off the radar where declaring it for depreciation could tip them off that you have taxable assets they want to know about. Best to not poke the badger.
 
How can you write of the depreciation value if the machine doesnt depreciate? I understand the tax law allowing for the machines depreciation to be written off all in the first year, but wouldnt you know the depreciated value when filing your taxes?

It doesnt make sense to depreciate a piece of equipment that hasnt lost any value yet.
Why would you not wanna depreciate it 100% provided you intend on keeping it a while.
Tax saved that year with the depreciation help cash flow.
Who cares if it costs when you sell it. You e had that cash the whole time because of the initial deduction.
I’d rather have then money in my account than the governments.
Am I wrong on this somehow?
 
Why would you not wanna depreciate it 100% provided you intend on keeping it a while.
Tax saved that year with the depreciation help cash flow.
Who cares if it costs when you sell it. You e had that cash the whole time because of the initial deduction.
I’d rather have then money in my account than the governments.
Am I wrong on this somehow?
The time when you don't want to is relative to your $$ in its taxable brackets.
example: say you have $300k into the 30% tax bracket, and you bought a $800k machine,
you wouldn't want to write off the 100% of the $800k that year, because, you possibly may be in similar situations in the fallowing years.
using the unclaimed portion to pull higher taxable numbers out of those brackets for subsequent years.

I know some people with more pennies than me, that they have commercial warehousing built, they don't rent it out at all for years on purpose, and have for the next 5 years this write off that pulls money
out of higher brackets for the next five years.

Its optimizing taxes based on bracket percentage deduction over time, rather than gimme my money now, but overall I loose more.

my wife works as an accountant, but I don't know shit, but hear somethings:D

2 cents :cheers:
 
Im finding out the hard way that these deductions arent what they are cracked up to be. I bought a used machine for $80,000 in 2018. Due to sec 179 and depreciation, it has been fully depreciated now. It has held its value well, and others of the same make, year and model are selling for around $80,000 now. ( well, they are listed for $80k anyway )

So my CPA told me if I do sell it for $80k, since it has been fully depreciated I will owe $28k in taxes for depreciation recapture.
Guess I should have bought crappier machines that lose value quickly. Maybe I should have gone with Haas afterall.....
If you bought a used machine for 80k in 2018 and it is worth 80k now then you should feel good about that. Haas's hold value amazingly well. Brothers not so much. We couldn't get 1/2 for our brothers (or ANY interest whatsoever on them) even when we had one at around a year old we wanted to sell. Perhaps that was divine intervention though as we are keeping it really busy anyway.

The way I understand it (sec 179) - you can write off the purchase amount (up to the full amount if you want the year you buy it) then you get "bonus depreciation" on top of that. So you write off 1/5 of it per year and the 5th year it's value is zero on the books. If you sell it at that point or any time after it is just considered taxable income therefore the 28k or whatever your tax bracket is for that year takes affect and is owed.
 
Truth is we don't know how bad, for how long this is going to get.
I personally this year, because of knowing this was being pushed by government/fed, to reduce inflation.
I paid off all my machines, my house, everything to zero debt, and didn't buy a needed 5 axis machine this year,
instead kept 3 years worth of expenses, and am chillin at home posten on here all day, with almost zero work coming in.:willy_nilly:
 
You technically "can't" write off 800k if you made 300k. Can't show a loss.

Prolly not on a section 179, but if your 7 yr depreciation pulls you down that far, Shirely you can show a loss - if you are a C Corp. I carried an $80K loss over, and slowly drew on that for a few years. I think there is a 7 yr limit on how long you can claim that loss. Ex - if we had only shown a $10K loss for each of the next 7 years, I would lose the last $10K.


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I am Ox and I approve this post!
 
I said $300k in a 30% bracket

edit: if you missed that part, you missed the whole thing.
Well...Perhaps I missed the whole thing then...as I don't think the tax bracket has anything to do with it (unless I am missing something in that regard)

This is just what a quick google search says about it:

One thing to note, the company must be profitable in order to take the Section 179 deduction, it cannot be applied to create a net loss for the business. However, there is currently no business income limitation for bonus depreciation, so a business could take a net loss by taking advantage of bonus depreciation.
 
Well...Perhaps I missed the whole thing then...as I don't think the tax bracket has anything to do with it (unless I am missing something in that regard)

This is just what a quick google search says about it:

One thing to note, the company must be profitable in order to take the Section 179 deduction, it cannot be applied to create a net loss for the business. However, there is currently no business income limitation for bonus depreciation, so a business could take a net loss by taking advantage of bonus depreciation.
Yeah, sorry, your missing the entire point. :cheers:
 








 
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