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Selling Equipment? The Tax Surprise Contractors Don’t See Coming

Selling Equipment? The Tax Surprise Contractors Don’t See Coming

A lot of contractors think the tax strategy ends when they write off the equipment.

It doesn’t.

If you sell a truck, machine, or other business asset after taking depreciation deductions, you may trigger depreciation recapture and create taxable income you were not expecting.

That is why it is not enough to think about the deduction when you buy the asset. You also need to understand your basis, how the asset was depreciated, and what happens when you sell, trade, replace, or dispose of it.

Good tax planning covers the full life cycle of the asset—not just the upfront write-off.

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