Confirmed with Link: Senators are for sale - and it’s a Gong Show

[Crosside]

GARRIOCH: Gary Bettman will sit down with Sutcliffe and NCC as suitors enter next stage of bidding for Senators

NHL commissioner Gary Bettman will be in town Monday while Postmedia has also learned six potential suitors for the Ottawa Senators will visit this week to get a first-hand look at the city along with the operation.

ottawasun.com

 

[coladin]

They will have depreciation expense until they exhaust the ACTUAL DEPRECIATION ammount.

They have to had paid that money in the first place. There is no benefit beyond not being charged tax on cost of sale, which no one is charged

If the venue paid back fully on the input costs plus 100million dollars in the first year - do you think they would be sad because they are paying taxes? Of course not! That would mean they made a profit.

Carrying forward losses only lasts as long as the losses - it is ultimately better to make profit.

There is no net gain as long as the losses are real.

You are probably thinking about how Trump carried forward losses to huge benefit.

He borrowed money, had huge losses, went bankrupt, had the dept from the loan mostly forgiven but still carried forward those huge losses to use against actually profitable enterprise. He only had a net gain because his dept was forgiven in the that scenario.

I’m not thinking about Trump, at all. I just went to my accountant and have first hand knowledge how this works (which I knew anyways) . I am currently enjoying the tax savings of a property I bought that wiped out my income. Very real income. It is how the business plan operates to ensure that companies continually invest for tax saving purposes to the benefit of the property and those who use it. It wouldn’t make sense to buy anything, ever, if this type of expenses system was not in place.

And I already stated that the CTC is perfectly fine building, but there is no depreciation expense to write off anymore as you stated. That building is easily viable for 20 plus years. Tax-wise it isn’t , and they are paying taxes now.

This is a brand new 1B arena, and depreciation will be a massive tax savings.

 

[Silky Johnson]

I’m not thinking about Trump, at all. I just went to my accountant and have first hand knowledge how this works (which I knew anyways) . I am currently enjoying the tax savings of a property I bought that wiped out my income. Very real income. It is how the business plan operates to ensure that companies continually invest for tax saving purposes to the benefit of the property and those who use it. It wouldn’t make sense to buy anything, ever, if this type of expenses system was not in place.

And I already stated that the CTC is perfectly fine building, but there is no depreciation expense to write off anymore as you stated. That building is easily viable for 20 plus years. Tax-wise it isn’t , and they are paying taxes now.

This is a brand new 1B arena, and depreciation will be a massive tax savings.

No. You are wrong. Profit is always better than having past losses completely reduce taxes on future earning.

The reason why you get massive tax savings from the new arena is because YOU SPENT REAL ACTUAL MONEY TO BUILD IT.

The tax savings are only equal to the cost of the building. YOU HAVE NO NET benefit from them.

You are literally describing every business activity in the world.

Revenue - Input & operating cost = taxable earnings.

In the case of a huge capital expense like a building, it takes a long time to realise. So the upfront input costs in the form of depreciation can be used as a tax reduction for many years against revenue.

However, if you never exhaust the tax benefit from the input (and upkeep) costs, YOU NEVER ACTUALLY MADE ANY PROFIT. And that is bad.

I promise you that I am a lot more qualified in corporate finance then your personal accountant, who you are most likely just misunderstanding.

 

[coladin]

No. You are wrong. Profit is always better than having past losses completely reduce taxes on future earning.

The reason why you get massive tax savings from the new arena is because YOU SPENT REAL ACTUAL MONEY TO BUILD IT.

The tax savings are only equal to the cost of the building. YOU HAVE NO NET benefit from them.

You are literally describing every business activity in the world.

Revenue - Input & operating cost = taxable earnings.

In the case of a huge capital expense like a building, it takes a long time to realise. So the upfront input costs in the form of depreciation can be used as a tax reduction for many years against revenue.

However, if you never exhaust the tax benefit from the input (and upkeep) costs, YOU NEVER ACTUALLY MADE ANY PROFIT. And that is bad.

I promise you that I am a lot more qualified in corporate finance then your personal accountant, who you are most likely just misunderstanding.

We are misunderstanding each other, but ok.

I’m not talking about past losses.

I’m not disputing that real money was spent on the building.

I promise you that you are not understanding the concept of depreciation expense. Depreciation expense hides profit.

And caps lock are not necessary.

 

[IpsoPostFacto]

We are misunderstanding each other, but ok.

I’m not talking about past losses.

I’m not disputing that real money was spent on the building.

I promise you that you are not understanding the concept of depreciation expense. Depreciation expense hides profit.

And caps lock are not necessary.

Depreciation is in no way 'hiding' profits. it is spreading it out over the next X years, but it's not like you are hiding anything - your tax return will have on it "what my asset cost me; how much the depreciation is; how much money I made from that asset". No hiding; they know.

A long term asset (like say a building) is a valid business expense and can be counted against revenue to calculate profit and ultimately taxes.

if we don't use depreciation then how are you accounting for that expense? taking it all in year 1? even if we allowed that, it would not make a difference. You would have a hug loss in year 1 and would then allocate that loss against future revenue to net each year profit to 0 (and therefor no tax) until you run out of the loss. That number of years is going to be pretty close to the depreciation schedule used for your annual property depreciation.

Do we allow you to make up your own rules about depreciation. "I'll take 30% next year, then 50%, and then the final 20%". Another use of depreciation - everyone depreciates their building or machine etc., at the same rate and number of years and matches directly to revenue and therefor profit for a given year. if I'm looking to buy your business or invest in it, I can apply various ratios to see if it is well run vs. some other business.

Looks like you have purchased a rental property in your personal capacity, so sure, depreciation is driving your personal income tax to as low as zero. Great. if I have your personal situation correctly, did your accountant explain this: (stolen from the interwebs, so bolding was a 'comes with')
--================================
Let’s say, for illustration, you currently pay tax on your rental property profits at 31%, based on which tax bracket your total personal income (including the rental) puts you in. When you claim that CCA expense, you will save tax at that percentage each year (assuming your income remains consistent). However, when you sell the property, assuming you sell it for more than you paid for it, you will pay tax on half of the capital gain (difference between what you sold it for and what you bought it for), as well as tax on the “recapture” of all of the CCA you claimed over the years (ie. because you essentially recovered that money in the sale of the property).

In a year where you have sold a property, that taxable capital gain and the recapture of the CCA both get added on to your other personal income, possibly boosting you up into a higher tax bracket for that year. For many people, this causes tax paid on the recapture to be at a much higher percentage (and therefore total amount) than tax you saved over the years by claiming it.
--====================================
everyone's situation is different, but when I did this 30 years ago as a younger Sens fan, I bet on myself and figured I would be making more money later and thus in a higher tax bracket, so I didn't take the depreciation expense for tax purposes.

You can't hide from the tax man. one for you, 19 for me.

 

[Silky Johnson]

We are misunderstanding each other, but ok.

I’m not talking about past losses.

I’m not disputing that real money was spent on the building.

I promise you that you are not understanding the concept of depreciation expense. Depreciation expense hides profit.

And caps lock are not necessary.

Apologies for cap locks

Depreciation does not hide profit. It compensates you for previous expenses (losses). No net benefit, at all.

Unlike other expenses, cost of good sold & operating costs, you have an asset that you hold over multiple tax periods. That asset reduces in value calculated generally by original cost minus residual value divided by lifespan of the asset (most tax jurisdictions have preset rules by asset type).

Earlier I said it is like other input costs (COGS) but technically that is debatable. Often it is not put against Gross Profit and comes after that line. It depends on how tied it is to production. In my opinion, in this case its very much tied to production in that you cannot "produce" hockey without an arena and is the place you are paying to go to with a hockey ticket - but that is besides the point.

However, from a mechanical point of view, it's exactly like any other input cost - just spread out over a longer period.

It does reduce taxes - but only in so much as you spent on it. So it is not desirable - it just is. It really gives no Net Benefit at all. Just compensates you for previous expenses. Very much like carrying forward losses.

It is desirable to be liable for taxes on a building - because that means you are making profits.

 

[Silky Johnson]

Depreciation is in no way 'hiding' profits. it is spreading it out over the next X years, but it's not like you are hiding anything - your tax return will have on it "what my asset cost me; how much the depreciation is; how much money I made from that asset". No hiding; they know.

A long term asset (like say a building) is a valid business expense and can be counted against revenue to calculate profit and ultimately taxes.

if we don't use depreciation then how are you accounting for that expense? taking it all in year 1? even if we allowed that, it would not make a difference. You would have a hug loss in year 1 and would then allocate that loss against future revenue to net each year profit to 0 (and therefor no tax) until you run out of the loss. That number of years is going to be pretty close to the depreciation schedule used for your annual property depreciation.

Do we allow you to make up your own rules about depreciation. "I'll take 30% next year, then 50%, and then the final 20%". Another use of depreciation - everyone depreciates their building or machine etc., at the same rate and number of years and matches directly to revenue and therefor profit for a given year. if I'm looking to buy your business or invest in it, I can apply various ratios to see if it is well run vs. some other business.

Looks like you have purchased a rental property in your personal capacity, so sure, depreciation is driving your personal income tax to as low as zero. Great. if I have your personal situation correctly, did your accountant explain this: (stolen from the interwebs, so bolding was a 'comes with')
--================================
Let’s say, for illustration, you currently pay tax on your rental property profits at 31%, based on which tax bracket your total personal income (including the rental) puts you in. When you claim that CCA expense, you will save tax at that percentage each year (assuming your income remains consistent). However, when you sell the property, assuming you sell it for more than you paid for it, you will pay tax on half of the capital gain (difference between what you sold it for and what you bought it for), as well as tax on the “recapture” of all of the CCA you claimed over the years (ie. because you essentially recovered that money in the sale of the property).

In a year where you have sold a property, that taxable capital gain and the recapture of the CCA both get added on to your other personal income, possibly boosting you up into a higher tax bracket for that year. For many people, this causes tax paid on the recapture to be at a much higher percentage (and therefore total amount) than tax you saved over the years by claiming it.
--====================================
everyone's situation is different, but when I did this 30 years ago as a younger Sens fan, I bet on myself and figured I would be making more money later and thus in a higher tax bracket, so I didn't take the depreciation expense for tax purposes.

You can't hide from the tax man. one for you, 19 for me.

Well said.

CCA recapture is certainly an issue for rental properties but less so for Hockey Arena's. Most hockey arena's have limited or no value at the end of their usefully life beyond land value and the land wasn't being depreciated in the first place.

Problem with housing is that they tend to appreciate in value if anything.

No actual depreciation in value, tax authorities want their taxes back.

Your point about it being a problem for potentially changing tax brackets is something that should be noted by private investors. Not a problem for the corporate community with single rates.

 

[IpsoPostFacto]

]
Well said.

CCA recapture is certainly an issue for rental properties but less so for Hockey Arena's. Most hockey arena's have limited or no value at the end of their usefully life beyond land value and the land wasn't being depreciated in the first place.

Problem with housing is that they tend to appreciate in value if anything.

No actual depreciation in value, tax authorities want their taxes back.

Your point about it being a problem for potentially changing tax brackets is something that should be noted by private investors. Not a problem for the corporate community with single rates.

for sure, that was a little tack on for the OP who I assume purchased some sort of rental property in his personal capacity.

edit: in light of the original discussion, in a made up world where I have a rink that is fully depreciated, but is still 100% suited for the job - i.e. no need for a new one - shouldn't I punch my accountant in the metaphorical face if they suggest paying big money for a new one so I can ... slowly get the money back over the next 40 years. I think so.

 

[coladin]

Depreciation is in no way 'hiding' profits. it is spreading it out over the next X years, but it's not like you are hiding anything - your tax return will have on it "what my asset cost me; how much the depreciation is; how much money I made from that asset". No hiding; they know.

A long term asset (like say a building) is a valid business expense and can be counted against revenue to calculate profit and ultimately taxes.

if we don't use depreciation then how are you accounting for that expense? taking it all in year 1? even if we allowed that, it would not make a difference. You would have a hug loss in year 1 and would then allocate that loss against future revenue to net each year profit to 0 (and therefor no tax) until you run out of the loss. That number of years is going to be pretty close to the depreciation schedule used for your annual property depreciation.

Do we allow you to make up your own rules about depreciation. "I'll take 30% next year, then 50%, and then the final 20%". Another use of depreciation - everyone depreciates their building or machine etc., at the same rate and number of years and matches directly to revenue and therefor profit for a given year. if I'm looking to buy your business or invest in it, I can apply various ratios to see if it is well run vs. some other business.

Looks like you have purchased a rental property in your personal capacity, so sure, depreciation is driving your personal income tax to as low as zero. Great. if I have your personal situation correctly, did your accountant explain this: (stolen from the interwebs, so bolding was a 'comes with')
--================================
Let’s say, for illustration, you currently pay tax on your rental property profits at 31%, based on which tax bracket your total personal income (including the rental) puts you in. When you claim that CCA expense, you will save tax at that percentage each year (assuming your income remains consistent). However, when you sell the property, assuming you sell it for more than you paid for it, you will pay tax on half of the capital gain (difference between what you sold it for and what you bought it for), as well as tax on the “recapture” of all of the CCA you claimed over the years (ie. because you essentially recovered that money in the sale of the property).

In a year where you have sold a property, that taxable capital gain and the recapture of the CCA both get added on to your other personal income, possibly boosting you up into a higher tax bracket for that year. For many people, this causes tax paid on the recapture to be at a much higher percentage (and therefore total amount) than tax you saved over the years by claiming it.
--====================================
everyone's situation is different, but when I did this 30 years ago as a younger Sens fan, I bet on myself and figured I would be making more money later and thus in a higher tax bracket, so I didn't take the depreciation expense for tax purposes.

You can't hide from the tax man. one for you, 19 for me.

Bud. I don’t go on the internet to do my taxes for my company.

I am not going to conduct tax classes here to people who don’t have the faintest

 

[Silky Johnson]

for sure, that was a little tack on for the OP who I assume purchased some sort of rental property in his personal capacity.

edit: in light of the original discussion, in a made up world where I have a rink that is fully depreciated, but is still 100% suited for the job - i.e. no need for a new one - shouldn't I punch my accountant in the metaphorical face if they suggest paying big money for a new one so I can ... slowly get the money back over the next 40 years. I think so.

Yes. You would be forgoing actual cash profits for the privilege of not losing as much on the building a new building.

It seems pretty clear to me.

The reason you build a new building is because it will make you more revenue. The depreciation just means you will be taxed properly in the long run.

 

[Micklebot]

Hey @coladin , @IpsoPostFacto @Silky Johnson

I Tried fixing some of the messed up quotes for you guys, sorry if I screwed it up and deleted any of your actual posts, I was doing it from my phone, so ... hopefully it reads a little more clearly now.

 

[Tnuoc Alucard]

How is this kind of thing legal?

Feels like the super rich get a completely different set of rules from us little people.

same rules, just better educated, or able to hire expertise in these matters to use existing tax laws to their advantage… you or I could use the same tax laws, if we were up to speed on them as the “super rich” are.

 

[Qward]

*trained accountant watching the arguments unfold*

 

[IpsoPostFacto]

*trained accountant watching the arguments unfold*

If he's engaged in profit generating activity, he can probably expense 50% of that popcorn.

 

[coladin]

If he's engaged in profit generating activity, he can probably expense 50% of that popcorn.

Usually expensed at 4% yearly

 

[AchtzehnBaby]

Us mahn

 

[Golden_Jet]

Us mahn

Think he hinted at infrastructure, or help on other ways that aren’t financial.

 

[Micklebot]

Niko Sparks group includes the Rock... This just got real...

Deadpool vs the Rock battle royal in the cage for the franchise

 

[Sun God Nika]

Niko Sparks group includes the Rock... This just got real...

Deadpool vs the Rock battle royal in the cage for the franchise

wow.

 

[Senator Stanley]

Niko Sparks group includes the Rock... This just got real...

Deadpool vs the Rock battle royal in the cage for the franchise

Per what Brent Wallace has been told. Jason York says he's heard the name floated. Wallace also says that some of the financial backing is from David and Simon Reuben, part owners of Newcastle United.

 

[Cosmix]

We are misunderstanding each other, but ok.

I’m not talking about past losses.

I’m not disputing that real money was spent on the building.

I promise you that you are not understanding the concept of depreciation expense. Depreciation expense hides profit.

And caps lock are not necessary.

Depreciation expense does not hide profit.

Depreciation definition

Depreciation represents the estimated reduction in value of a fixed assets within a fiscal year. Tangible assets, such as buildings, equipment, vehicles and so on, are purchased in large lump sums.

 

[YouGotAStuGoing]

Niko Sparks group includes the Rock... This just got real...

Deadpool vs the Rock battle royal in the cage for the franchise

Dwayne 'The Rock' Johnson leads Maple Leafs fans in wrong chant at home opener

Dwayne Johnson led Maple Leafs fans in a "Let's Go Leafs" chant at Toronto's home opener Thursday night and no one was brave enough to correct him.

www.sportsnet.ca

Pass. Give me Reynolds all day, every day.

 

[Micklebot]

Dwayne 'The Rock' Johnson leads Maple Leafs fans in wrong chant at home opener

Dwayne Johnson led Maple Leafs fans in a "Let's Go Leafs" chant at Toronto's home opener Thursday night and no one was brave enough to correct him.

www.sportsnet.ca

Pass. Give me Reynolds all day, every day.

Why not both? They are acquainted afterall....

 

[YouGotAStuGoing]

Why not both? They are acquainted afterall....

At the risk of being considered myopic, I'd rather someone who loves Ottawa at the helm. Without knowing fine details, The Rock's involvement strikes me as exclusively for business reasons, whereas yes, there's that element to Reynolds' involvement... but there's also an obvious love of the city playing a part too.

 

[DaveMatthew]

Why not both? They are acquainted afterall....

Wallace insinuated there's the potential of Reynolds joining the Sparks group if they become the favourite.

He also said they're backed by the Reuben brothers out of the UK (big real estate guys and part owners of Newcastle United), who have a reported net worth of $19B USD, and the group's "hockey advisor" is Mattias Norstrom (close friend of Daniel Alfredsson's).

If they're involved and win, we'd have the 2nd richest ownership group in the league.

So it sounds like that group has star power and significantly more financial wherewithal than any other. Makes sense since they, apparently, came in far above anyone else in the first round of bids and are willing to go over $1B.

Another interesting tidbit he mentioned - the Kimel family's hockey advisor is Mats Sundin.