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Audiophile TT article in Forbes

I am going to try one more time with this tread because I believe the Audiogon Moderator is flagging this because of the naming of a name. In the latest Forbes special issue there is a nice article about the resurrection of vinyl and Audiophile grade TT. The article shows some nice pictures of high end grade TT with there tone arms and statements from VPI owner claiming every time he wakes up he pinches himself to think in a digital age sales are up steadily. But the big eye opener was that very well known vinyl and turntable guru from a major audio magazine is purchasing a one hundred grand table and tone arm combo Continuum Audio Labs Caliburn turntable & Cobra tonearm
for much less than retail what is much less the article never states but I would guess to venture half off listed which if my math is good would be fifty grand total. Now I don't really have a problem with this but in the article the writer states he the well known guru reviewer is also going to write off the purchase as a business deduction? I am not a CPA or a tax attorney but I would guess that this would raise a red flag at the local/federal tax office as being a LUXURY item. Can you honestly think that standing in tax court a judge wouldn't ask you do they really make a 100 grand turntable and why do you need this piece of gear just to listen and review a record or even having to compare it to the competition.
schipo
pabelson
344 posts
 
If he uses the turntable strictly for business, of course he can deduct it. (Or, to be precise, depreciate it, which means deducting a portion of it each year, for several years.) But if he uses it partially for pleasure, then he has to prorate the deduction.

If he buys a new "reference table" next year, that has tax implications for the depreciation he's already claimed. It gets complicated.

Bottom line: He's probably entitled to *some* deduction here, but he almost certainly cannot lop $50K off his taxable income as a result of this purchase.

(Disclaimer: I am neither an accountant nor an atorney.)

BTW, what issue of Forbes did this appear in?
triode
263 posts
 
Speaking as a longtime CPA (though not a tax guru), I believe he could easily justify depreciating this (and other) component purchases used in his "trade or business", as an offset to the income he receives from Stereophile and the Tracking Angle.
lloydc's avatar
lloydc
752 posts
 
If this deduction were allowed as a business expense, all similarly situated reviewers could deduct or depreciate their "reference" capital equipment. Hard to imagine this being acceptable to the IRS. "full time" probably does not matter if it meets the hobby-loss rules, and the same rules suggest that being a reviewer (rather than, say, a photographer deducting the Leica collection who produces and sells pictures for a profit) doesn't matter, as long as sufficient revenue is produced. Jaybo makes a cogent point that reviewer could be required to recognize income for the "discount". Surprising that there are no tax lawyers on this forum willing to weigh in.
schipo OP
1,268 posts
 
The latest special addition on the news stands now. Please enjoy the read and the pictures of some of the TT,it was almost if I was looking at penthouse for the first time. I am just happy to have audiogon as a place to place this and to all of you who disagree and agree with me the best.

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hevac1
812 posts
 
If it were a Auto reviewer or other high ticket item reviewer, the items would probably be leased and not purchased so all of the cost could be deducted till uncle sam depreciated it into oblivion. Then they could purchase it for even less money cause now it's used. Just try leasing a $100000.00 turntable and see what happens. LOL
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