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30% tax exemtion?

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Old 12-09-03, 07:46 PM Thread Starter   #1
ryuen
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30% tax exemtion?


my friend wants to get a custom comp by me but his dad doesnt because his dad wants some 30% tax exemption he THINKS he can get. i have never heard of this. 30% is A LOT! iunno if its because hes a student or he said his dad said something about office use declaration. his dad thinks if you buy a comp from like a store with a REAL receipt you can get 30% or some perecentage off. maybe because hes low income (his family)?

im trying to fight this right now. dont know if anyone knows about how this 30% (or 20 percent or whatever) works.

btw we live in CA



ps sorry if this is wrong place to talk.

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Old 12-09-03, 09:01 PM   #2
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i'm 90% certain that tax exemptions dont count for private sellers.....I believe that you would have to be a business in order to provide any sort of tax compensation. Even then, whatever you gave would be reimbursed by the gov't.....but again, you'd have to be a business in order for any tax exemptions to take place. that's a lot of paperwork there..
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Old 12-09-03, 09:09 PM   #3
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Declaring it as a business expense?
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Old 12-09-03, 10:48 PM Thread Starter   #4
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his dad is a doctor. not high income. i think his dad was saying declaring it as a office comp. i assume thats bussiness. how does that work? is it really 30%? thats hella lot.

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Old 12-09-03, 11:24 PM   #5
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I believe the way it works is, if you spend $1000 on a computer that you are using for work then your actual income is not $x but $x - cost of computer so that means you get to pay less taxes because you arnt earning as much, now if this $1000 + other tax write offs add up to enough then your income is decreased quite a bit. I could be wrong so someone correct my mistakes.
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Old 12-09-03, 11:59 PM Thread Starter   #6
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hmm im not catching you steve. can you or someone explain again?

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Old 12-10-03, 12:09 AM   #7
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lets say a person makes $40000 a year, thats theyre income. Now the government takes a percentage of that. Now if you buy a computer for work thats $1000 and then spend $2000 getting to work in your car, and spend $3000 for buissness trips, then spend $4000 on other random stuff that could be used for work. Then you are only actually earning $30000 income, so instead of taking the percentage off of $40000 they take it off $30000 and thats alot less. I could be wrong.
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Old 12-10-03, 01:26 AM   #8
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My understanding is the same as Steve978, but i'm not an accountant.

Presumably you get receipts when you buy components, just like when you buy a complete system. So he should still be able to claim it as a business expense.
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Old 12-10-03, 01:33 AM   #9
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ok this is how it works for business, when they business bought something they claim it as a business bought item and claim it to depreciate for X number of yrs,, during those yrs they get tax excempt, money not owed, for the item bought, so it would be over time and it all depends on how long they believe the computer cost vs how long it lasts,,
if it costs 2000 dollars and ran for 4 yrs tax on it is "x", but when claiming for business tax at the end of the yr the gov gives a tax break of "x"*tax/4 and is excempt for that yr... something like that

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Old 12-10-03, 08:16 AM   #10
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what I was saying earlier is that YOU, the seller have to be some sort of business. I dont believe that private sellers have the knowledge, let alone liscense, to provide receipts for tax purposes......

if all else fails, you can just give him a copy [read: COPY, you should keep the originals] of all the shipping receipts and let him do the rest. I mean, you're not even 18, he cant seriously expect you to know what to do in this kind of situation.
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Old 12-10-03, 08:39 AM   #11
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let him buy the components, then you put it together.

i've done something like that before. a good way to get him to agree is tell him you'll teach his son how to do it at the same time as you put the computer together

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Old 12-10-03, 10:26 AM   #12
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I'm pretty sure that's fraud mate...

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Old 12-10-03, 10:59 AM   #13
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Unfortuantly Cj is right. If an item is declared to be used for one thing but is used for something completely different. It is fraud The Gov't doesn't like to be taken advantage of. And if found out they will crackdown harder than a landlord if you don't pay the rent.

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Old 12-10-03, 12:35 PM   #14
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The other thing is if it's "office property" and the business goes bust wave goodbye to the rig.

Ah well, tell him whatever you feel but it's your soul...

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Old 12-10-03, 01:16 PM   #15
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Ask the kids dad how much he'll save. If it's a 2000 dollor computer you can build for 1500 (just using this as a ballpark) here is my math and myh understanding of how it would work.
His dad claims 2000 dollors tax expempt@ 30%, that's 600 dollors that's NOT taxed, then you multiply the money NOT taxed by how much he WOULD have lost if it were not tax exempt. Say it's 40% (he's a doctor so that's about right) which is 240 saved.
So for him the computer cost 2000 but he saved 240, so it's 1760. Still more expensive to buy.
Also consider the trust factor, his dad might not like the idea of all these random parts coming together by someone unqualified (i.e. not A+ certafied...etc). Now I beleive you can put together a computer and wouldn't think twice about it, but his dad probably does. His dad would probably not like the idea of you probing around his taxes to see how much he'll actualy save. Sometimes you just gotta let it go. *shrug*

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Old 12-11-03, 03:49 PM   #16
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His dad sounds like sort of an ass. I have a feeling this is just a farce because he doesn't want to buy it from you. If you try to argue about it, he'll probably just make some other bs reason up to avoid having you do it.
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Old 12-11-03, 05:50 PM Thread Starter   #17
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ya hes kinda of ass. i dont really really wanna do it. just i hate pre made computers. (like most of us).

plus something to do for winter break

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Old 12-12-03, 12:22 AM   #18
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Just figure out the cost of what you would build, tell him in lay man's terms about it (like 2500+ for AMD, 2.5 ghz for Intel, CD burning speed, ammount, not type, of memory, and hard drive capcity.) Give a time frame for how long it would take you to build (hopefully not more than a week.) It really shouldn't be hard to get a list of parts from Newegg for a good computer under $1000, monitor included.

Then, forget about it. If he doesn't want to do it that way, so what? I see at this. People who want to go buy an idiot box don't deserve a real computer. Let them have their Hewlett Crapart or Comcrap.
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