Today, I would like to introduce a new business strategy that can help you build net worth by using depreciable antiques in your business.
The strategy is simple: buy low, depreciate to zero, and sell high. You can achieve this by incorporating antiques into your business. For example, let’s say you’re deciding between purchasing an antique desk or a regular one for your business. Both desks sell for $5,000.
The antique desk not only adds a touch of elegance to your office but also offers a better financial outcome. After 10 years of use, you can sell the antique desk for $15,000, whereas your friend who purchased the regular desk only sells it for $500.
When considering the after-tax numbers, you come out 36 times ahead of your friend. Your federal taxes on the $15,000 proceeds from the sale of the antique desk are $1,500 on the $10,000 capital gain and $1,750 on the $5,000 of depreciation recapture. After taxes, you’re left with $11,750, whereas your friend only pockets $325 after taxes.
Antiques provide a unique opportunity to increase your net worth by acquiring beautiful assets that you can use in your business and expense under Section 179. Currently, you can expense up to $1,160,000 of qualifying costs using Section 179 expensing.
The concept of using depreciable antiques in business has become possible thanks to two musicians who fought hard for this change. Brian Liddle, a professional violinist, and Richard Simon, who played violin for the New York Philharmonic Orchestra, both used antiques in their careers and were able to depreciate their antique instruments to zero and trade them for even more valuable antiques.
I encourage you to give serious consideration to the use of antiques for your business. Not only do they create aesthetic appeal, but they also offer financial benefits that can increase your net worth.
If you have any questions or would like to discuss this opportunity further, please call Rick or I to book some time to discuss at 281-288-0909.
Dr. Jake Latimer / Partner