A recent article from Bloomberg Law examined how declining equipment inventories could impact dealers’ tax bills. For dealers using a LIFO (last in, first out) accounting method for valuing their inventory, whereby the most recently purchased products are expensed as cost of goods sold (allowing lower-priced, older products to be reported as inventory), this could prove particularly problematic. Where a LIFO accounting system normally seeks to keep reported income down when prices rise, the current inventory declines could trigger a recapture tax. READ FULL ARTICLE>>
