Friday, January 28, 2011

Bonus Depreciation

The AED folks had a Bonus Depreciation Seminar.
Here are some facts as I recall, consult with your tax professional to be sure I'm correct.

Bonus Depreciation, New Equipment

  • For 2011, Bonus Depreciation is 100% with qualifying new equipment purchase. 2012 deduction drops to 50%
  • This bonus can be used for current year, carry back( if you had to pay taxes in the past 3 years) or for carryover into 2012
  • Vehicle purchases- Vehicles over 6,000 lbs(like heavy duty work pickup trucks) qualify for 100% deduction. For vehicles below 6,000 lbs, luxury vehicle rules still apply but there is an additional $8,000 this year.
  • Some States are not allowing this deduction for State Taxes
Sec 179 Deduction, New or Used Equipment
  • For 2011, Bonus Depreciation is a max of $500,000 with qualifying new or used equipment purchase. 2012 deduction drops to $125,000. It starts to phase out at $2 million.
  • This bonus can be used for current year but CANNOT be used for carry back. For carryover, deduction is limited to $25,000 a year
  • Some States are not allowing this deduction for State Taxes
Some other points that came up from discussion:
Trades- Deduction is equivalent to value of trade plus your cash out of pocket
Internal Moves- Moving from inventory to rental fleet qualifies
New?- If equipment is on first rental and less than 3 months, it qualifies for new in the year it was put into service, otherwise use sec 179
Again, consult your tax professional for confirmation.

More information and a bonus depreciation calculator is available here from AED-

Thursday, January 27, 2011

Associated Equipment Dealers Summit

At the AED Summit in Orlando, FL
We will see what the Equipment Dealers are expecting for 2011
Check it out-

Saturday, January 8, 2011

Hey Grinder Guy, how can I save money on wear parts?

All wear parts are different, but most everyone uses some sort of replaceable tip that is impregnated with tungsten carbide chips for longer wear life.
Tungsten Carbide, or Carbide as it is commonly called, is a combination of Tungsten and Carbon*. Tungsten, a mined natural element, is in limited supply on this Earth and the supply is decreasing rapidly as its use on new and old wear applications is increasing.  There are currently no manmade substances that provide the same wear resistance for a comparable price. Therefore the price of tungsten carbide is sky rocketing, which is directly affecting the cost of your wear parts. You have probably already noticed the increase in price this past year.
A Carbide impregnated surface (or coating) provides a greater wear resistance than the base steel that the wear parts are made of, but carbide is more brittle, and will break off or chip off wear part surfaces when it impacts solid objects like rock or steel.
Limiting the number of edges or surfaces the carbide is placed on can reduce your costs.
What to do:
1.       Review your old tips that have already been replaced
2.       Which surfaces are wearing and which are not using YOUR grinder on YOUR material?
3.       Why pay for carbide that you are throwing away?
4.       Only pay for what you are using and it is possible to save $5 per tip.
5.       Your supplier should offer you choices, otherwise, find another supplier.
In the video above, look at the bead of carbide that is along each side of this tip. It has hardly been touched while the entire top of the tip is missing. This side bead is a complete waste of money for this tip on this grinder and in this material.
Need help figuring out what to do?
Send a photo of your used tips to
For wear parts pricing and information, visit