[LMB] OT: Thor Power Tool, yet again

[Mitch Miller]

Yep, Ed, that's correct:

The full citation is Thor Power Tool v. Commissioner, 439 U.S. 522 (1979).

Hedwig, please feel free to forward the note. 

Ed, books are not depreciated.  They are inventory, which is not subject
to depreciation.  They're either sold or scrapped.

And when the Supreme Court says, "This is the law," that's the law.  Sometimes
what they say is a confirmation of what everybody believes the law to be, and
sometimes, as in this case, it's a change.  (Although, of course, it's a change
to what the IRS says the law ought to be.)

Mitch Miller


From: "Ed Burkhead" <edburkhead at insightbb.com>

Mitch,

So, it was a Supreme Court decision that made the change, not a
Congressional change in tax law?

Ed



From: hedwig <hedwig at tima.com>

May I please forward this to a friend (off list) who believes this?

Hedwig


From: "Ed Burkhead" <edburkhead at insightbb.com>

Hedwig,

You're sure welcome for forward it as far as I'm concerned.

But my bookstore owner just thought the tax law had changed.  He didn't say
that the publishers were *taxed* on their inventory.

Could it be that they just don't get the tax deduction from depreciating
them to nothing until they DO dispose of them?

Or, could they get a tax hit in some way by depreciating them, then selling
them for full price?

The downside is that, whether it's from being too dumb to understand tax law
or from a real change, publishers seem to have changed their warehousing
behavior for backlist book.

Ed