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Information for my Accountant…

I recently purchased two Chandler and Price “Old Style” presses and my accountant wants to know what they are worth. They are both in good working order with no serious defects outside of normal wear and tear. (and ink and oil…)
#1 is a10”x15” circa 1888 and #2 is an 8”x12” circa 1906
Any ideas or comments?
Thank You All!
John

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Probably worth about $500 each depending on condition. Also depends on your location (presses in Iowa are much cheaper than you might find in California).

Brad.

For income tax purposes they are worth their cost, what you paid for them in dollars and cents. What else are you planning to do with them that requires your accountant’s need? Donate them?

Gerald

Brad,
I am located in South Jersey, about 30 miles outside of Philadelphia PA and Wilmington DE.
Considering the age, these presses are in great condition, no rust and mechanically very sound.
Thanks for your comment,
John

Gerald,
You see, I sold some of my screen printing equipment and used the proceeds to purchase these presses and the remaining contents of an old Philadelphia print shop.
My goal is to phase out of screen printing entirely and go digital letter press.
My daughter and her husband are graphic designers in NYC and have expressed a great desire to learn the trade.
So, my job as the Dad, is to lay the groundwork for the next generation. Heady stuff indeed!
Thank You for your comment and
Happy Holidays!
John

What you actually paid is exactly what they are worth, by any accounting standard, not what anybody else thinks they might be worth. No other values apply, certainly not the value of any screen-printing equipment sold.

I concur with Gerald.

Kind of odd that a CPA would ask this question.

Hi John,

Maybe you can provide a range of values for your accountant — the price you actually paid, and a range of current market values according to what’s listed in places like eBay. Sometimes accountants like to see a lower value to minimize estate taxes, and sometimes they like to see a higher value to minimize the capital gain should the presses be sold later on.

Barbara

Sounds like you paid a single sum for a number of pieces of equipment. In that event, the accountant is trying to allocate the purchase price among all the things you bought - that would be necessary. If you can’t get a good handle on the value of the presses, maybe you value the other equipment and the presses are what is left.

If he bought, say, 40 cases of type and a slug cutter and a lot of furniture as well as surplus of other ancillary items, it would be more difficult to establish actual value for the presses if it were a one-lot non-itemized sale.

So I can see why he would want to know what people value the presses at, and how this information could be applicable to his accountants’ purposes for assessing value to items rather than lots.

Without sounding harsh, I concur with Gerald and with Parallel, 100%. Your accountant should have asked for the bill of sale as proof to the IRS of the value of the assets. Presumably these are not capital assets that require depreciation, and in fact if you sell them at a future date, they will likely have appreciated in value unless the equipment is damaged or lost, so don’t let your accountant depreciate them unless you plan to wear them out, as you’ll have to reverse that if and when you sell them.

When the IRS makes an inquiry, the bill of sale will be the only acceptable proof, not an estimate from an online forum. If your accountant feels differently, you should seek another accountant immediately. The bill of sale should itemize the assets for sale if possible.

If you had inherited them or acquired them in another way, then you’d need an appraisal from a used equipment dealer, notarized, and supported by a series of valuation by equivalent supporting documents.

Congrats on the new presses by the way.

Ask you accountant if he can value all the assets as a lot since they were acquired as a lot. If he can not, you’ll need to get an appraisal from a used equipment dealer on an item by item basis adding up to the total of the sale price.

By the way, if valuing the assets by appraisal, you might ask the appraiser to value long lived assets like presses and cabinets more highly and the value of assets like type on a lower basis (I’d value the type at scrap weight prices) by weighing each case and taring the case itself off the weight. I’d do this so that if the presses increase in value before I sell them I’d have less capital gain against those assets. Also, type and consumables (ink, rule, type, paper, envelopes, etc…) are typically viewed by accountants as expendable rather than capitalized assets.

If the presses are used to make money, they are subject to tax depreciation whether you like it or not. Its not elective. The failure to claim a tax deduction will not prevent you from having income tax consequences when the presses are sold.

I think you will do better to get your tax advice from your accountant, or another accountant if you don’t have confidence in the current one, rather than from an online discussion group. You are getting more mis-information than accurate information, and without all the specifics of your actual situation no one can give you advice to rely on.

I debated as to whether to respond to CarolinaPrinter’s comments, and decided that I should clarify my prior remarks.

Speaking as someone who actually does have an accounting degree, I’ll simply note a few items and clarify others. This does not represent tax advice as I am not your accountant.

CarolinaPrinter is correct in noting that you are required by the IRS to depreciate capitalized assets.

To clarify my prior remark, you are not required to capitalize all assets in a business.

Century old printing presses could be capitalized and then depreciated on the MACRS schedule over 7 years.

However, given that both assets are probably each less than $1K in real value, you could choose to not capitalize them, and then you would not be required to depreciate them. In the corporate world we generally do not capitalize PC’s office furniture, and other assets with real values less than $5K/item because the cost of tracking them and accounting for them as depreciating assets outweights the tax benefit. This is where I was headed with the advice above.

Ask your accountant about this. If you’re already depreciating other assets like buildings, vehicles, more expensive equipment like platemakers, heidelberg cylinders, etc… it might very well be worth capitalizing these old presses, even though the depreciation is probably only a few hundred dollars a year.

If however, you’re a sole proprietorship with only the two presses, complicated accounting will make your book keeper rich, but it won’t help you. It will depend on how your have structured your business, and whether your business purchased the assets or you purchased the assets and are transferring them to the business or retaining personal ownership of them.

We’ve gotten far afield from your original question, but the advice is consistent from all respondents. Go back to your accountant, don’t seek valuations of the presses on here.

Loan them to the business, the value then has no bearing on the books . you will have to declare the cost if you rent them to your business though
I own my presses personally and lend them free to myself for my work , as you generally dont smash them up its not a problem but the company can insure your press for purpose of repair in the case of damage ,especially as they are loaned not owned by the business!
Note that i am based uk but its worth a look into the angle in case you have different rules .