Does any RAILROADER know the story behind the advertisement in Rail Way Age from a company dealing in near-new freight cars? These ads. were from about 30 to 40 years ago. A Port Washington P.O. box was the address and I believe the area code was 516. Was it just a p.o. box and a phone in some nondescript office on Long Island or somebodies basement?
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Freight Car Dealer in Port Washington...
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There was a car broker who operated from an office on Broadway in Lynbrook for many years through the 70's and 80's. Could be the same one?
During the mid 1970's and into the early 1980's, the tax code provided for the purchase of new freight cars by individuals/corporations who would then rapidly depreciate them for tax purposes. It was almost a cottage industry, hence the Pt. Wash address? When the tax laws changed and removed the incentive, so did the investors. This is the rudimentary explanation. Perhaps others can fill in more fully.
The most common of these cars was the "SSI" boxcars which were orange/red.
The most common of these cars was the "SSI" boxcars which were orange/red.
The following is from the Washington Post article in 1978 on how the scheme worked. Pickens RR was another boxcar tax shelter too:
"Purchase of a new boxcar qualified the buyer for a federal investment tax credit amounting to 10 percent of the car's value, a direct write-off $3,000 - equal to the down payment."
"Depreciation also could be deducted from taxes; under the method used by most buyers, that amounted to a $3,000 deduction the first year. In addition-boxcars, which perennially are in short supply, are eligible for a bonus depreciation deduction the first year amounting to $2,000."
"Other expenses could be deducted, too: placement fees paid to put the car in service, management fees paid to Railvest and interest on the borrowed money; the total of these deductions varied, depending on when the car was purchased and other factors, but easily amounted to $1,000."
"Thus the $3,000 invested in a down payment immediately produced an offsetting tax credit of $3,000 and tax deductions of $6,000. The tax treatment of the boxcar investment has not been challenged by the Internal Revenue Service, several investors said."
"Purchase of a new boxcar qualified the buyer for a federal investment tax credit amounting to 10 percent of the car's value, a direct write-off $3,000 - equal to the down payment."
"Depreciation also could be deducted from taxes; under the method used by most buyers, that amounted to a $3,000 deduction the first year. In addition-boxcars, which perennially are in short supply, are eligible for a bonus depreciation deduction the first year amounting to $2,000."
"Other expenses could be deducted, too: placement fees paid to put the car in service, management fees paid to Railvest and interest on the borrowed money; the total of these deductions varied, depending on when the car was purchased and other factors, but easily amounted to $1,000."
"Thus the $3,000 invested in a down payment immediately produced an offsetting tax credit of $3,000 and tax deductions of $6,000. The tax treatment of the boxcar investment has not been challenged by the Internal Revenue Service, several investors said."
Kelly&Kelly wrote: ↑Fri Jun 19, 2020 6:18 am There was a car broker who operated from an office on Broadway in Lynbrook for many years through the 70's and 80's. Could be the same one?Address, P.O. box, was in Port Washington.