"Don Priebe" <priebe[at]iname.com> wrote:

- quote -

One 9th Circuit case (Browning) said that the taxpayer
couldn't depreciate his violin, but that case was based on
the fact the taxpayer presented no evidence of any kind.
That was also a pre-ERTA case, and later courts say that it
doesn't apply.

A 2nd Circuit case (Simon) says that violins and bows can be
depreciated if it can be shown that they are actually
subject to wear and tear. Something that isn't used and as
a result won't wear out (e.g. a painting hanging on the
wall) cannot be depreciated.

The tax court seems to agree (Simon).

Stu

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- quote -

How would he calculate his basis?

(There have been loopholes involving depreciation-law
differences. At one time, UK depreciation belonged to the
nominal owner; US depreciation belonged to the beneficial
owner. So if a UK company bought an airplane and leased it
to a US company, with the lessor having the right to buy it
for $1 after 10 years, they could both take the
depreciation.)

Seth

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- quote -

Tks so much for a very engaging response. I will follow
this and see exactly what happens.

will post if I hear anything.

bill

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<Recapture of violin depreciation
I have a vague recollection that really valuable violins,
bows, and such cannot be depreciated even if used in a
business context because they do not have a determinable
life. If I buy the "Mona Lisa" for use in my private
pay-to-look museum, can I depreciate it?

--
Don EA in Upstate NY

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- quote -

Form 4797 is used for sale of business assets and provides
inputs to various other tax forms. Recapture of depreciation
produces an entry of ordinary income on(assuming he used the
instrument as an employee under misc. income on Form 1040.
The profit from price appreciation on business equipment
above the orignal basis before depreciation is a capital
gain so Form 4797 carries entries to Sch D where the
calculations are performed.

Bill Patch

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- quote -

Which country(s) tax laws was he subject to for the years in question?

If the property was used in a business conducted overseas and he was not
subject to U.S. tax law at the time, then I'm guessing neither the
income nor expenses (including depreciation) from that business are
relevant to the tax return in question.

-Mark Bole

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Stuart Bronstein <spamtrap[at]lexregia.com> wrote:
- quote -

What if it wasn't depreciable in the UK, even though it
would have been in the US?

Seth

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"Billy" <billnospamever1234543[at]aol.com> wrote:

- quote -

I haven't researched this issue, but it's possible the
"allowed or allowable" language in the code could make
whether or not he actually took depreciation in the UK
irrelevant to determining the amount of his gain.

Stu

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"Arthur Kamlet" <kamlet[at]panix.com> wrote:
- quote -

tks Art, was used in his profession while in UK but not
here. Not sure if it was depreciated but will find out.
Thge violin was sold to a collector here.

more later.

bw

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Billy <billnospamever1234543[at]aol.com> wrote:

- quote -

Was this used in his job? Did he depreciate it or should he
have been depreciating it?

In any case he has a gain upon sale and it would sure be
taxable.

If this is business equipment, it is reported on a 4797 and
ends up ordinary income. If personal use property, long
term gain, not a collectible unless the Secretary has
determined that musical instruments are collectibles.

--
ArtKamlet at a o l dot c o m Columbus OH K2PZH

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My friend is an ex violinist for London Symphony.

He is married to a US citizen, living in Syracuse, NY but is
not a citizen himself by choice.

He purchased a violin in the UK 30 yrs.ago and used it for
his work, for $10K (US $ equivalent) and sold it in the US
recently to a collector for $35K.

He asked me how this might be taxed?

Is this a capital gain or collectible or taxable at all in
US?

tks all

bill

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