Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Hi. We recently incorporated and are saving for a large equipment purchase.
Someone suggested we open a "sink fund" and we could use the money we
have earmarked for this purchase ($20,000) as a tax deduction for this year.
Then when we buy the Equipment ($65000 purchase price) we will have
already gotten $20,000 depreciation value and so would figure depreciation
only on the remaining value of $45,000. Is this correct?
Can we save the money in a money market account?
What happens if we end up needing the oney for something else, do we just
pay the tax on it or is there a penalty? How do we set up this kind of account
and what is the technical term for it?
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.