Dealer Tools For $Written By: Gary Bartecki
Article Date: 06-01-2005
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.
Frankly, I see too many of you paying taxes you don't have to pay.
Its shaping up to be a great year for both equipment manufacturers and dealers. Pent-up demand for product, along with minimal hikes in interest rates, has firmed up pricing for new and used equipment, and rental rates. Industry optimism has been steadily improving since early 2004, and when I visited the AED Convention in January and ConExpo/Con-Agg in March, everyone - and I mean everyone - was smiling.
There is no doubt that Bonus Depreciation stimulated sales. Section 179 also helped. (Note that AED's Washington office is compiling data related to the bonus program to show its effect on the manufacturing and distribution sectors. Hopefully, the politicians will dig this report out the next time industry sales slow.)
Now that you're all making so much money, you better be doing some profit and tax planning. To assist members with this process, BDO Seidman sponsored AED's first CFO Forum May 23-24 in Chicago to discuss many topics near and dear to the hearts of dealers - with tax planning one of the major topics. We hope to run two more of the CFO Forums this year at different locations around the country: Watch your email and this magazine for more information on where and when.
The conference is limited to 25 participants to keep it manageable and to encourage stimulating dialog. As I am sure you all know, once we drill down into tax matters the discussion heats up as everyone explains how they do it and why their method is right.
If I had a dime for every method used to depreciate equipment, I would be sitting on a beach somewhere puffing on a great cigar and sipping a cold beer.
The tax discussion takes most of a day, because there are so many issues and so many ways to resolve them and the IRS has provided numerous alternatives, as well. (When we tried to cover these topics at the AED Convention in January, we simply ran out of time and could not drill down to the required level to provide an overall understanding of the issues and thoughts on how to proceed.) Frankly, I see too many of you paying taxes you don't have to pay.
It's become so complicated a lot of dealers are just afraid to deal with any changes in the way they transact business, even if it means paying out meaningful tax dollars.
In March, AED sent out the 2005 Cost of Doing Business survey, which covers 2004 data. If you completed and returned it, you'll get the results within a couple of weeks. There were only a couple of minor changes from the 2004 survey: Certain questions were eliminated and a line in the income statement was added for IT expense.
AED has also begun to offer a quarterly Dealer Financial Summary. The brief survey necessary to prepare the quarterly report was mailed to you in April. The data requested mirrors the Critical Profit Variables found in the CODB. The purpose of this brief summary is to provide input to dealer members throughout the year.
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