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Q.Is the cost of a new computer immediately deductible or must it be depreciated?

A.If the new computer is being used solely for business, it may be fully deductible in the year of purchase as a "capital equipment" expense. Pursuant to Internal Revenue Code Section 179, a business may deduct a certain amount of capital assets per year ($24,000 in 2002 and $25,000 in 2003) against business income. Most small businesses can fit all of their yearly capital expenditures into this allotted amount. You should also note that even if you put the entire cost of the computer on your credit card, you can still qualify for this deduction.

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Copyright 1999-2019 Melissa C. Marsh. All Rights Reserved. All Information on this website is subject to a Disclaimer and Use Agreement. This information is provided as general information only and should not be construed as legal advice. We advise you to seek the advice of competent legal counsel to address your own specific questions, facts and circumstances.