Business question: Tax write offs for gear

[JPM]

I'm primarily a self employed music teacher but make a little income off my gear as well as use it for my students so I lump my recording studio in with my teaching studio at tax time.

The first year of our business I was able to fully write off my instruments but my computer/digi001 had to be depreciated because it was classified as technology.

I realize most assets must be amortized but I'm wondering about outboard gear that holds it's value better than computers and sometimes appreciates in value like some instruments do. Last year my taxman depreciated some outboard gear and then it got me thinking that he may not have known to make a distinction (if there is any in the tax laws) between technology like computers, printers, etc and more permanent things like mics and pres which to me seem more like instruments.

Sorry if this is a very elementary question but I just wanted to make certain what is correct.

Thanks,

JPM

[hle144]

I just got through being audited for some gear I wrote off in 2003. My problem was that I am a W-2 salaried employee and the man wanted to know why I wrote off so much gear as "work related" when I am a salaried employee. This was for about 10 vintage guitars and $25k worth of gear for that year. Writing gear off is better if you file a 1099.

In hindsight, like currently, I try not to write off ALL the gear purchases of that year, remember, if you report buying it, you have to report selling it. In my case with the W-2, that was my main issue for the audit.

So in my case, I write everything I can on the "schedule C". My accountant has the details but I wanted to inform you of my expirience.

[JPM]

Thanks. Yeah, we file schedule C. I guess my question was more about classification of various types of recording gear that an accountant not familiar with the difference between a computer and a console would lump together as "technology" and would have to be depreciated as opposed to being able to write off the entire amount at once thereby significantly reducing my taxable income for that single year. But maybe I'm just not understanding how depreciation works in general. Perhaps it's no different in the long run.

JPM

[nukmusic]

don't overlook that in some cases, the IRS may consider the work you do as a "hobby". Its dependent on how much of a profit you make from the gear. no or low profits (year after year) = hobby