Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

Archive for January 2nd, 2004

Posted by taxguru on January 2, 2004

The Great Supply-Side Experiment of 2003 – It worked with the Reagan tax cuts and it’s working with Bush’s. Anyone who opposes the tax cuts (all the DemonRats) is openly wishing for a recession or depression and should be treated with all of the respect such a stand deserves.

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Posted by taxguru on January 2, 2004

Libertarian Heroes of 2003 – It’s good to see there are still some elected officials who believe in the concepts of freedom and limited government control over our lives.

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Posted by taxguru on January 2, 2004

Howard Dean wants to raise your taxes, whether you’re dead or alive. – Not that I think this psychotic imbecile has a snowball’s chance in Hell of beating Bush; but it’s good to never forget what the DemonRat Party stands for – government confiscation and control over as much of our money as possible.

A recent Fox News on-air blurb calling the DemonRat nomination process a “two horse race” between Dean and Clark used the wrong animal analogy, considering the official mascot for that party. A bigger couple of JackAsses would be hard to imagine.

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Special Tax Breaks

Posted by taxguru on January 2, 2004

In response to an email about our tax code including special tax breaks for certain companies and individuals, I sent the following response.

It is a normal part of our legislative process that tax breaks designed specifically for certain campaign contributors are tossed in. Nobody actually reads the complete entire tax bill, so it is easy to sneak these special breaks in and nobody else learns about it until it’s too late.

I have long said that the best and most lucrative investment in this country is donations to our rulers who can do this. It is very common for donations in the range of $100,000 resulting in tax breaks in the millions. In some cultures, these would be considered to be bribes; but they are standard operating practice for our system. This was part of my motivation for my infamous Tax Legislation – Digestion poster.

I don’t have a list of the currently operative special breaks. You can probably find some more specifics from some of the taxpayer watchdog groups, such as Citizens Against Government Waste.

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Donating Depreciated Assets

Posted by taxguru on January 2, 2004

I recently received the following question illustrating why it is important to be careful on whom you rely for tax advice:

The detail man for the medical supply house says I can donate old, depreciated equipment and write off up to $5,000. He explained it as much like you told me about donating used clothing up to $499 without a receipt. Is this true or do you know anything about it?

My response:

Either that guy doesn’t know what he was talking about or you misinterpreted what you were told.

I am very well experienced with this issue.

For depreciated assets that are donated, your charitable donation is limited to the lower of its current market value or its net cost basis on your books (cost less depreciation). If it’s fully depreciated, your deduction for donating it is zero.

Allowing you to deduct the cost twice, as depreciation and as a charitable donation, is a perfect example of something that is too good to be true. Is this person perhaps trying to encourage you to get rid of your current equipment and buy new replacements from him?

The $5,000 limit has nothing to do with no receipt required. A receipt is required for any single donation of $250 or more. A formal appraisal is required for assets valued at more than $5,000. Total non-cash donations of $500 or less for the year don’t require any details to be included with the tax return.

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Posted by taxguru on January 2, 2004

The Problem With The Minimum Wage – As with all efforts by the government to artificially manipulate natural market forces, the actual results are 180 degrees off from their stated goals.

Tax Cuts Do Help The Economy After All – Well, duh. Why else were the DemonRats and their media propagandists fighting so hard against the cuts? Their playbook is to do as much damage to the economy and national security as possible and then blame Bush for it.

Beware of the Alternative Minimum Tax – More and more people are being sucked into this insidious tax that was supposed to only ensnare the most evil rich among us.

Taxing Foreign Investors Would Damage Home Economy – Leveling the paying field of tax rates around the world can only hurt us here in the USA.

Schwarzenegger to Swing Big Ax on Budget – The proper tool for the situation.

IRS Strengthens Employee Tax Compliance Program – Interesting news release from IRS on how they are cracking down on tricks used by their own employees on their personal tax returns. For most IRS employees, it is one of the costs of having such a fun job that their personal tax returns are generally reviewed more closely than those of the general public.

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