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Topic: Samples.... on the tax side of things

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  1. #1

    Samples.... on the tax side of things

    Um, this is sorta related to samples.. so here goes

    Those of us who can deduct sample lib purchases from our taxes.. question: where do you deduct this? Is this a Section 179 "depreciable asset"? I'm thinking no, because:

    A depreciable asset is property that you use in your business to produce income. It is property that has a useful life of more than one year and wears out over time or loses its usefulness.
    Samples don't lose usefulness.. do they? Or maybe they do, because better stuff keeps coming out.

    Anyone know?
    Sam Hulick
    Composer
    http://www.samhulick.com/

  2. #2
    Senior Member
    Join Date
    Sep 1999
    Location
    Burbank, CA. US of Mexico
    Posts
    651

    Re: Samples.... on the tax side of things

    Why don't you deduct as standard schedule C?

  3. #3

    Re: Samples.... on the tax side of things

    Sure they do. Why else would a VSL Pro Ed owner upgrade to the VI... And now that I have upgraded, Pro Ed is near usless (if you get my meaning) Likewise think of price drops. GOS now sells for $199, while it once was the best string library out there nd cost many times that

  4. #4

    Re: Samples.... on the tax side of things

    Isn't this what accountants are for? Not sure I'd ask advice from musicians when it comes to taxes any more than I would ask my accountant for musical advice.

  5. #5

    Re: Samples.... on the tax side of things

    I'm on the phone w/ the IRS. They just clarified.. sample libs are NOT software, but are considered data (which is true). Therefore, Section 179 does not apply. I'm still on hold..getting further confirmation. I figure I'll post here, in case anyone else needs to know this stuff.

    EDIT: Btw, guys.. you know the IRS is obligated by law to answer all and any questions you have. That's why I called them. An accountant can make it easier/quicker for you, but it's not necessary just because you lack tax knowledge. Grab TurboTax for $40-$50, call up the IRS with any questions.. and you're all set.
    Sam Hulick
    Composer
    http://www.samhulick.com/

  6. #6

    Re: Samples.... on the tax side of things

    Samples have no value at all; you are buying a licence. Tax offices don't always know this, so it pays to make sure that they do!

    D

  7. #7

    Re: Samples.... on the tax side of things

    OK here's the deal straight from the IRS:

    Sample libraries are considered data, not software. They do not qualify for Section 179 because you do not own them. Therefore, if you bought a bunch of sample libs (VSL, Stormdrum, EWQLSC, etc), you can lump them all together under Schedule C's "other expenses" category, list it as "Non-exclusive, non-transferrable license for use of recorded music samples" and just put one lump sum that you paid for all libraries.

    There you have it.

    DISCLAIMER: I am not responsible for any goof-ups in your taxes.
    Sam Hulick
    Composer
    http://www.samhulick.com/

  8. #8
    Senior Member Steve_Karl's Avatar
    Join Date
    May 2004
    Location
    Pittsburgh, PA 15206 USA
    Posts
    1,425

    Re: Samples.... on the tax side of things

    Good info on the license aspect ... thanks.

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