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New tax law brings big deductions for buying used construction equipment

Contractors buying used construction equipment in 2018 and over the next five years will reap some hefty tax breaks, including one that was previously only available for purchases of new equipment.

The tax breaks come in two forms, section 179 and bonus depreciation, both of which now allow contractors to deduct 100 percent of the cost of new – and used – equipment in the first year they put the equipment into use. That also includes financed equipment.

“It’s a huge benefit,” says Ken Sibley, partner in charge of the Dallas office of Calvetti Ferguson CPA firm. “The used market now is really going to get a benefit because you can actually write the stuff off; whereas, before you couldn’t write it off as aggressively.”

For Gabe Vitale, president and CEO of C&L Sweeping & Pavement Maintenance in Jackson, New Jersey, the tax break combined with business growth is causing him to increase his annual equipment purchases of used street sweepers. He expects a windfall come tax time to help the company’s cash flow.

“We’re really taking advantage of that right now,” he says. “We’ve been picking up a lot of our used equipment, taking the deduction and doing a complete refurbish on them.”

 

Read more on this artcle at https://www.equipmentworld.com/new-tax-law-brings-big-deductions-for-buying-used-construction-equipment/

 

Blog courtsey of Equipmentworld.com