Depreciation of Fire Arms

[MichaelG]

I have a client that uses Fire Arms in his profession, He is a registered Maine Guide. He guides people in Trapping and Hunting. These are used for protection from wildlife.

Can he depreciate them?

[TaxmannEA]

I would think that they could be depreciated as long as they are business use only. I can see an auditor disallowing part of the deduction due to personal use issues. Depends on the facts in your case.

[jainen]

>>a client that uses Fire Arms in his profession, He is a registered Maine Guide.<<

According to this application form http://www.maine.gov/ifw/licenses_permits/pdfs/2012%20GuideLicense.pdf, Maine Guides are not even allowed to use firearms unless they have a regular hunting license. So it seems weapons are not an ordinary and necessary business expense for a Maine Guide, or at least carry a major element of personal recreation.

Also, "firearms" is a big category in which some kinds of weapons would not have any reasonable purpose for a guide. Finally, the kind of weapon that might be appropriate if maintained would likely hold its resale value, triggering recapture of depreciation later.

[MichaelG]

Thank you. That helps me on answering his question concerning this.

[jainen]

>>That helps me on answering his question<<

Well, fine, but I hope it doesn't convince you! Ordinary and necessary does not mean required. Presumably he is a small independent whose business model might very well call for being armed. Not his entire collection, but he probably has certain tools of the trade with de minimus non-business activity. Assuming all his records are in order, guns are seven year MACRS.

[Pacun]

Jainen is right... the arm might hold its resale value BUT remember the phrase "depreciation allowed or allowable". Look for the depreciation category and other relevant information about the use of the arm and maybe you should start depreciating it.

[MichaelG]

He brings in clients mostly from out of state to hunt and trap. He posesses a hunting, and trapping license during the season. When hunting Bears he baits, and that can be dangerous sometimes. He usually get 20 clients a year during the Bear, and Moose seasons. He target practices with them to keep up proficiency. I just don't want to put a red flag on his return. When I asked him for a list of equipment he uses in his profession these were a part of that list. The only time these fire arms leave his house is when he is either target shooting, or on the job.

The percentage of business use I figure is 90%.

[Catherine]

In a profession where being able to hit what you are aiming at can be a matter of life or death for both you and your clients, I would say that target practice (unless he states it is personal, with those firearms) could also be considered business as well.

Every firearm handles differently, feels differently, recoils differently, sights-in differently - and those differences are greater with the higher calibers needed to stop large predators. Hitting a moving target (like an angry bear) that must be hit in the right place (head!) with ONE shot (because there may well not be time for two!), requires excellent proficiency and familiarity with _whatever_ firearm he might have with him at the time. That would NOT be the time to have to remember "this one recoils fast up and left, so I need to hold a little down and right to hit center". His response must be automatic; therefore he must practice, with every firearm he takes out in the Maine woods.