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Click on tax break for donated computers

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in Small Business Tax

Is your company replacing PCs with Macs or upgrading its computer system? Instead of trashing or recycling old computers and peripherals, your company can take an enhanced write-off by donating the equipment to certain nonprofit organizations.

Strategy: Give used computer equipment to an elementary or secondary school (or a supporting charity) or a public library. With this type of gift, an employer may deduct an amount equal to its basis in the property, plus one-half the ordinary income that would have been realized if the equipment had been sold (up to twice the amount of its basis).

Only C corporations qualify for this special write-off. Plus, you must donate the equipment within three years of acquiring it for its original use or completing the manufacture of the donated property.

Tip: This deduction is scheduled to expire after 2007, but it’s already been extended several times in the past.

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