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This will be an interesting thread moving forward......

AzIron

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Joined
Jun 14, 2016
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1,541
Location
Az
Is one to assume there rental costs where high because of more work than iron to cover said work or is it because the primary equipment that is owned was broke for reasons listed across 90 plus pages here and needed rentals to pick up the load

I would guess it's the second reason and tax reasons aside witch is probably the justification of the expenses after the first year maintenance pressure will be key.

Basically I would wager that this venture for this business is a bandaid that's a right off but shows that management misunderstood the reasons for needing rentals in the first place
 

hosspuller

Senior Member
Joined
Aug 27, 2014
Messages
1,869
Location
North Carolina
It s... I was also told that they are expecting me to be able to care for this stuff. Oh great............MORE WORK o_O

More work = security & options for you. It's up to you to manage the load so your health and sanity are preserved. As a separate business, you can turn down jobs and/or raise your price. (As in your rates make it a simple choice to bring on the "lube guy" full time) The principles of supply & demand apply.
 

Vetech63

Senior Member
Joined
Aug 10, 2016
Messages
6,362
Location
Oklahoma
I never know when something is rented unless I see it on a job while I am out. I would say the rental was quite common from January through mid- August.........That was before HNC and TNH left and not much was even getting done. Since then.......I'm not sure. I know they tend to start numerous jobs around the same time, so the equipment gets thin. Some of the Tulsa equipment went to the OKC location this last year to get them equipped so that is even less equipment here. I have been able to keep most everything running unless it's a major breakdown and I get hung up on parts........or it waits for me to get to it. I know the main super doesn't like to rent equipment as he is always contacting me about repair status on selected pieces. If it is still down and waiting on parts, they may very well rent something to keep their jobs going.

The lube guy is going to be a bust here. The general super and him have had past heated words and the main super isn't going to advance him into anything else. I think they are waiting for him to give up and quit myself......but he keeps poking along! I did have the former truck mechanic contact me a couple of weeks ago looking to come back to this company as he now regrets leaving 2 years ago. My only issue with him is he literally no experience with heavy eq........BUT, I could use him in other simple areas that take a lot of my time and he .....I think.........is trainable. I told him to put in an application to the company and if they start looking, I may throw a good word his way. Right now, they don't seem to be interested in hiring help. My rates are going to go up drastically here quickly, I have to see if I can curb the workload a bit or start making some of this work in flat rate/ quote formats to make some of these jobs even more profitable. I don't think they are going to care either way as long as the equipment is being taken care of.

I was told they are going to start unloading some of the older stuff soon. I have my line of credit on stand-by. I'll be looking to get some deals.
 

Zewnten

Senior Member
Joined
Apr 2, 2018
Messages
553
Location
Earth
The lube guy is going to be a bust here. The general super and him have had past heated words and the main super isn't going to advance him into anything else. I think they are waiting for him to give up and quit myself......but he keeps poking along!
Talk about cutting your nose off to spite your face.

I did have the former truck mechanic contact me a couple of weeks ago looking to come back to this company as he now regrets leaving 2 years ago. My only issue with him is he literally no experience with heavy eq........BUT, I could use him in other simple areas that take a lot of my time and he .....I think.........is trainable. I told him to put in an application to the company and if they start looking, I may throw a good word his way.
Are you going to add a surcharge for training and managing? Or let them cover his mistakes and if/when he's compitent snag him for yourself...not that I would do that or anything. I'm guessing the reasons why he quit are still there and he will leave for them again unless his situation has changed.
 

stinky64

Senior Member
Joined
Feb 25, 2017
Messages
860
Location
java center ny
Occupation
big truck wrench/fixer of things
The lube guy probably said he needed to service a piece of equipment and the super said he couldn’t have it. I’ve been in that situation and it occasionally could become a pissing contest between me and an operator or supervisor
"I don't to want drive those other two yard horses/ trucks, this one is my favorite". Sound familiar? I've witnessed physical altercations with 2 morons fighting over the shiny new forklift when there were 10 other ones sitting in the pile next to it.
 

ianjoub

Senior Member
Joined
Jun 22, 2018
Messages
1,437
Location
Homosassa, FL USA
The company lease is a tax scam. It does allow for charging costs of the machines to individual jobs. I’m not going to proffer any advice to someone who has been making money on these people without any worry about come backs and such. If you are comfortable, carry on.
Scam? How is it a scam? The government makes the rules, companies do business within the framework provided to them.
 

John C.

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Jun 11, 2007
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Northwest
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Because it is only available to very rich companies. A shell corporation owned by a construction company buys the machines and gets a tax write off in the form of depreciation. They lease the machines to their construction company who writes off that cost as an expense. So you and I end up subsidizing large companies and driving the small contractors out.
 

DMiller

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Feb 21, 2010
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16,430
Location
Hermann, Missouri
Occupation
Cheap "old" Geezer
Adding the leasing side double dips the deduction.
More than one company I worked for over the years used that. Bought machines as one company, secondary leased the machines for use or became leasing agency for the first company, garage further still was a write off as a Third company performing contract maintenance where mechanics were Contracted Employee and their services a write off against bottom line of garage.

All a tweak on language using a doppler eye view for almost completely legit.
 

ianjoub

Senior Member
Joined
Jun 22, 2018
Messages
1,437
Location
Homosassa, FL USA
Because it is only available to very rich companies. A shell corporation owned by a construction company buys the machines and gets a tax write off in the form of depreciation. They lease the machines to their construction company who writes off that cost as an expense. So you and I end up subsidizing large companies and driving the small contractors out.
As I said, it is not a scam. It is using the rules provided by the IRS.

The scam is income tax and the IRS.
 

hosspuller

Senior Member
Joined
Aug 27, 2014
Messages
1,869
Location
North Carolina
...
The leasing allows almost a complete pay off at taxpayer expense.

I used to think like that until I started doing taxes. Deductible in business does not mean the govt paid for anything. (unlike grants, subsidies, and payments) It just means one's taxable income is less. You still have to produce the money to pay for everything.

The key to true profit is not your gross income, but how much money you keep after taxes.
 

suladas

Senior Member
Joined
Jun 30, 2016
Messages
1,731
Location
Canada
The owning with one company and leasing to another provides another huge advantage, in the event the operating company runs into troubles the assets are protected as the company owns nothing. It's why so many do it, including me. I don't know about the tax advantages in the USA for it, but up here there is no additional tax advantages.
 

John C.

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Jun 11, 2007
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Location
Northwest
Occupation
Machinery & Equipment Appraiser
Don't know about Canada. In the US, neither company is protected if one goes down. Leasing company is usually making payments to a finance company that are being paid by the construction company. If there is a disaster that destroys the machines, insurance is what pays for that.
 
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