S‑Corp Basis Trap with Bonus Depreciation

Buying a new truck or piece of equipment before December 31 can feel like the ultimate year-end tax hack, but this episode breaks down why that decision can either save you thousands or create a painful tax bill you never saw coming. Mark J. Kohler and Mat Sorensen walk through the real math behind deductions, bonus depreciation, basis, and business-use percentages so you don’t fall into the traps many business owners hit when rushing into a purchase for the write-off. If you’ve ever wondered whether you should buy now, wait, or skip the purchase altogether, this conversation gives you the clarity you need.

You’ll learn how tax brackets, depreciation schedules, and financing choices impact your allowable deduction, why bonus depreciation isn’t always the smartest move, and how S-corp basis affects whether you can deduct anything at all. The guys also explain year-end timing strategies, the time value of money, and how to prioritize deductions that actually move the needle—while avoiding the mindset of treating tax planning like a last-minute school assignment.

If you want to make smart year-end decisions, hit like and subscribe for more practical tax and wealth-building strategies. Have a question about your specific situation? Drop it in the comments! And if you’re considering a major purchase before December 31, watch this episode before heading to the dealership or equipment lot.

You’ll learn:

• How to avoid the biggest year-end tax mistakes business owners make when rushing to buy equipment or a new truck
• Why “just because you can doesn’t mean you should” is the most important rule in year-end tax planning
• The difference between a tax deduction and a tax credit, and why confusing the two leads to expensive decisions
• How to calculate whether a year-end equipment purchase actually saves you money after factoring in your tax bracket
• Why business-use percentage determines whether your vehicle deduction is $100,000 or $30,000
• Why 100% bonus depreciation can become a trap if you finance equipment without having basis in your S corporation
• Why contractors, doctors, and other high-income earners should not automatically take bonus depreciation in one year

Get a comprehensive tax consultation with one of our Main Street tax lawyers that can build a tax strategy plan with an affordable consultation that will leave you speechless!! 

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