From: utzoo!decvax!duke!bcw Newsgroups: net.taxes Title: Re: Deduction questions... - (nf) Article-I.D.: duke.2944 Posted: Tue Jan 25 18:35:23 1983 Received: Fri Jan 28 04:04:00 1983 References: mcnc.1492,uiucdcs.1373 From: Bruce C. Wright @ Duke University Re: Computer depreciation That's easy - if you are depreciating an item over a period of years, and the depreciation period has not yet run out when you sell or otherwise dispose of the item, then your "initial investment" cost is the UN-depreciated cost (that is, the fraction not yet depreciated), and you must pay capital gain tax if you sell the item for more (always the case if it has been depreciated to 0 ...), or you may take a capital loss if you sell the item for less. This is true for anything, of course, not just computers; but the problem is that computer value drops somewhat faster than the depreciation the government allows you ... leaving you usually with a capital loss to claim. Unfortunately, capital gains/losses are loaded towards capital gains, i. e., you don't pay much tax on capital gains (relatively), but then you don't get to deduct very much (relatively) on a capital loss (they are handled differently from other types of losses where you can usually deduct a larger share - maybe even all - of the loss in some circumstances). Bruce C. Wright @ Duke University