that is above your depreciation , that is a use of cash. And depreciation is just your old capital spending that gets written off over time. So in Alphabet's case last year you made an investment of $8.5 billion dollars.
Yes. What you do basically is you take capital spending, you go to the statement of cash flow and take capital spending plus acquisitions minus depreciation . And the reason I include acquisitions because many companies buy other companies because that's a faster way of getting up to speed than building something de novo, where you got to hire people, you got to get-- so it's just a faster way.
what they should, and where companies get tax incentives for doing the right thing-- accelerated depreciation for green energy investments, for example; accelerated depreciation for state-of-the-art technology like that Pepsi plant-- there are a variety of ways to alter-- imagine if our foreign aid were connected with good clean
regulation um so this is a a second topic that's particularly important um long depreciation cycle in red will be the new capital plant we build because
So maybe you had cash flow positive. But with the depreciation , you're at zero. Or maybe you're even a loss on your rental property for tax purposes, which could be a good thing.
That means if you're going out and you're buying rockets, for example or other businesses, or other machinery or equipment that is above your depreciation , that is a use of cash. And depreciation is just your old capital spending that gets written off over time.
Another-- yes. It's above depreciation . That's an excellent question. Yes. What you do basically is you take capital spending, you go to the statement of cash flow and take capital spending plus acquisitions
And that's what they got. There's depreciations . My head wants to explode when I start to think about that stuff.
You've got to write it off over time. And you do that through depreciation . So it's kind of a paper expense.
And you look at her return, she hadn't taken depreciation on any of them over the years. So the benefit of the depreciation is that it's an expense you can deduct against your other income from the rental properties. So maybe you had cash flow positive.
So a lot of our clients just leave the debt in their personal name, transfer title, keep paying the debt, and that's not an issue. But we can generate enough depreciation in the home office deductions, hiring your kids, other strategies to generate that the expenses are more than the income
VR set. Uh if you have a car, there's about $4,000 of electronics in even the average car. The television itself has been pulled into a Moore's Law type depreciation . Like, for many years we had just tube TVs. Now, you have LED TVs that drop in price at a much faster rate. So, it's
So a lot of our clients just leave the debt in their personal name, transfer title, keep paying the debt, and that's not an issue. we talked about earlier-- in addition to what Matt mentioned about depreciation .
the curiosity, the creativity, the intrinsic motivation, that I think all children are born with. And it's formal schooling that oftentimes leads to the depreciation of that engagement and curiosity. And so what I found-- what I wanted to do in the book was do two things.
regulation um so this is a a second topic that's particularly important um so over 30 some years the blue will be the depreciation
And at a time when psychoanalysis was in vogue. And I wonder if given the periodic depressions that he went through and this self-depreciation that he was prone to, why he never considered going into something that everybody seemed to be doing at that time?
The tax books are a lot more conservative. They're conservative. They take higher depreciation expense than they do for shareholder expense. They may be writing off expenses immediately for shareholder reporting-- no, for tax reporting,
So I think most people nowaday, in this ecosystem, know that Uber is about to file for IPO. People who are buying in post-IPO-- pretty much anyone who's not a millionaire-- will see a return or a depreciation -- but, you know, 2x, 3x, or 20% loss.
I think with respect to real estate, believe it or not, one of the biggest ones that we see missed is depreciation . So for those of you who may be new to real estate investing, depreciation is you buy a property, just like a stock. You don't necessarily get to deduct the property right away.
She'd owned them for 10, 12, 15 years. And you look at her return, she hadn't taken depreciation on any of them over the years. So the benefit of the depreciation is that it's an expense you can deduct against your other income from the rental properties.
I'm going to talk about the price-earning ratio later. So the way he defines owner earnings, he says it's net income plus depreciation plus amortization
What are some common mistakes that CPAs make in the tax field when they're working our returns? I think with respect to real estate, believe it or not, one of the biggest ones that we see missed is depreciation . So for those of you who may be new to real estate investing, depreciation is you buy a property, just like a stock.
And you made a case with some of these companies that go bankrupt-- you may not expect that they go bankrupt, but it gives you a starting point to say, OK, what's the relationship between capital spending and depreciation . Or if working capital is a problem, why are their receivables going up?