Tax Savings For Breweries

[Brewery Finance]

Congress has recently extended the amount that a small business may write-off for capital expenditures to $250,000. Breweries that acquire equipment usually prefer a substantial deduction in a single tax year, rather than a little at a time over a number of years. The accelerated deduction is known in the IRS tax code as a Section 179 Deduction. This incentive is in place for equipment that is placed in service before December 31, 2009 and is designed for small companies.

Even better, the law now allows for bonus depreciation of 50% for qualifying assets (this in addition to the regular first-year depreciation).

You can take advantage of Section 179 if you purchased the equipment outright or even if you financed it through a Non-Tax/Capital Lease (a lease with a $1 buyout, 10% Payment Upon Termination, or an Equipment Finance Agreement).

If you are interested in more detailed information, please shoot me an email and I'll forward a more detailed explanation with a tax savings calculator that you can customize for your own situation

[coastalbrew]

My momma always told me that something that seems too good to be true probably is...

So you're saying that I could write off all the equipment that I would need to buy to start a brewery as long as I bought it with cash or with a non-tax/capital lease? Since I don't have that kind of cash, what is this lease deal about?

[South County]

The "$1 buy out lease" is the industry standard for equipment. Even if your financed with a bank they usual have a leasing portion of the loan for equipment that is through a 3rd party. That's how all of our bank dealings have been. Another term would be "rent to own" with interest.

[Brewery Finance]

There are certainly some restrictions...I'd be happy to email some more information to you if you would like.

rickw@breweryfinance.com