Masonry Magazine April 1989 Page. 27
TAX MATTERS
(continued from page 25)
who would then have paid the bank directly from their personal funds.
Want to learn more about S corporations? Send for the special report, A New Tax Superstar... S Corporation, $25, to Blackman Kallick Bartelstein, 300 South Riverside Plaza, Chicago, IL 60606.
SERIES EE BONDS-A UNIQUE TAX TOOL
There are few investments that can be called a tax-saving tool. Series EE bonds are such an investment. First of all they are exempt from state and local taxes. The interest earned on these bonds can be taxed in one of four ways. You decide which will save you the most taxes:
1. Pay tax on the interest earned each year even though none of it is received until the bond matures.
2. Defer paying tax on all interest earned for the years the bond is held until it is cashed in.
3. Wait beyond maturity and pay tax on all interest earned when the bond is cashed in.
4. Convert the EE bonds at maturity into Series HH bonds. This continues to defer the interest earned on the EE bonds until the HH bonds are cashed in. HH bonds pay interest annually, which is taxable as received each year.
Both Series EE and Series HH bonds are guaranteed to provide an annual rate of return of six percent, or 85 percent of the rate paid on five-year Treasury notes, whichever is greater.
HOW TO SOLVE THE BUSINESS
AUTO LOAN PROBLEM
I'll bet this situation describes millions of taxpayers: They own a car in their own name, use if for business and are paying interest on a loan that financed the car's purchase.
Let's take a look at the tax rules. When a car is bought by a corporation or other business entity, the interest on the auto loan is fully deductible as a business expense. Unfortunately, when an individual employee (even a stockholder/employee) buys the car, the auto loan interest is considered consumer interest. This is true even if the car is used 100 percent for business. Only 20 percent of consumer interest is deductible in 1989, 10 percent in 1990 and none starting in 1991.
Obviously, business owners can have the business buy the car to save the interest deduction. When structuring an auto-perk program for nonowner employees, the interest problem should be considered. Another way to save the interest deduction when the employee (owner or not) is a home owner is to take a home equity loan so the car can be purchased for cash. Interest on a home equity loan of up to $100,000 is fully deductible.
Blomquist Heads Demo Expo '90
Robert Blomquist, vice president of sales for Lull Corp., St. Paul, Minn., has been appointed chairman of the Demo Expo '90 Show Promotion Committee. Making the announcement was Craig Reynolds, of Caterpillar Inc., president of the Industrial and Construction Equipment Division (ICED) of the Farm and Industrial Equipment Institute.
As chairman, Blomquist heads the committee that will be promoting exhibitor and attendee participation in Demo Expo '90, a demonstration trade show to be held in Louisville, Ky., on Sept. 2830, 1990. Their spec sheets come to life as show visitors have an opportunity to see equipment operate in job-like settings.
FOUR STAR EQUIPMENT
SPECIALIZING IN BUYING AND SELLING USED MASONRY EQUIPMENT "NATIONWIDE"
* Forklifts
* Mixers
* Skidsteers
* Scaffolding
* Water Blasters
* Grout Pumps
* Loaders
* Masonry Equip.
USED ROUGH TERRAIN FORKLIFTS
USED MORGAN SCAFFOLDING
USED 5' MASON FRAMES
Call Ron or Russ
FOR YOUR COPY OF OUR QUARTERLY
USED EQUIPT. SALE, SEND US YOUR
ADDRESS & PHONE NUMBER.
FOUR STAR ENT. EQUIPMENT
30400 Bast Jefferson
Grain Valley, Mo. 64029
816-228-2252
National Equipment Consignments
MASONRY-MARCH/APRIL, 1989 27