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Always Full Service.

Always Full Service. Economic Stimulus Act of 2008: The Section 179 Deduction. Associations…. Increased Benefits from 07'-08’. 2007. 2008. Expensing limit: $128,000. Expensing limit: $250,000. The threshold before the expense is phased out is $500,000.

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Always Full Service.

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  1. Always Full Service. Economic Stimulus Act of 2008: The Section 179 Deduction

  2. Associations…

  3. Increased Benefits from 07'-08’ 2007 2008 Expensing limit: $128,000 Expensing limit: $250,000 The threshold before the expense is phased out is $500,000 The threshold before the expense is phased out is increased to $800,000 50% bonus depreciation is added.

  4. The Economic StimulusAct of 2008 • The Economic Stimulus Act 0f 2008 is a new tax act that was signed by the President on February 13th, 2008. The terms of the act include two temporary incentives designed to spur capital equipment purchases: • reinstating the 50% bonus depreciation • Increasing the Section 179 limits. • It is estimated that these two incentives will create $40 -$45 billion in tax benefits in the form of accelerated write-offs of equipment purchases for U.S. businesses.

  5. Tax Act At-A-Glance • Section 179 Expensing • Increases expensing limit from $128K to $250K for 2008 purchases • Phase out dollar for dollar when purchases exceed $800K • Property can be new or used and must be • placed in service by December 31, 2008 • Expensing levels will drop at the end of 2008 • Bonus Depreciation • 50% additional first-year depreciation on MACRS property with recovery period of 20 years or less • Remaining basis (the other 50%) depreciated under normal MACRS rules • Property must be new, ordered, purchased and • placed in service during 2008 • Will expire in December 31, 2008

  6. Section 179 • Section 179 allows small businesses to deduct up to $250K, up from $128K in 2007, of purchases in 2008. It is the same as taking a 100% depreciation deduction in year one. • To apply, the purchases must be committed and placed in service in 2008. The threshold before the expense is phased out is increased from $500K to $800K. • Property must be tangible personal property, which is actively used in the taxpayer’s business and for which a depreciation deduction would be allowed. The property must be used more than 50% for business and must be newly purchased property. • The deduction is disallowed if the taxpayer does not have taxable income for the year the property is placed in service. However, the disallowed deduction may be carried forward to a non-loss year.

  7. Section 179 Savings Calculators… Tax Savings Under $250K Tax Savings $250K or Over

  8. Benefits To Ryko & Distributors • Educating the Ryko sales force to the increase in the new section 179 expense limits will encourage Ryko equipment purchases, which means more sales. • The benefits are only applicable for this year, so customers considering an equipment purchase will be compelled to purchase in 2008 or lose this tax benefit. • A sales rep with even a basic understanding of these benefits can separate himself from the competition and position himself as a true consultant. • Your equipment financing partner, Patriot Capital has a wide variety of programs available that allow the customer to obtain the capital they need and take advantage of these tax benefits. • You’ve got another reason to ask for the business in 2008.

  9. Lead In Sales Questions • Are you familiar with the new section 179 and bonus depreciation benefits? • Did you know that if the equipment is not in place and operating this year you will not qualify for the tax write-off? • Are you aware that the entire purchase price of Ryko equipment can be written-off against your profits for 2008? • If I showed you a way to save 35% off the purchase price of your equipment, would that help you move faster? • If we could get you new equipment, ensure that you qualify for the tax write-off, and postpone all of your payments until 2009, would you be ready to say “yes”?

  10. Section 179 Tax Benefits • Does your customer realize or know about the tax savings available to him? • Does he realize that this is a “use it or lose it” annual benefit? It may not be available for 2009. • Business owners usually prefer to deduct the cost in a single year, rather than a little at a time over several years. This deduction is known in tax code as a section 179 Deduction. Customer may expense up to $250,000 if the equipment is put into use in 2008. In addition, he may depreciate any excess on the depreciation schedule for that asset. The rules are designed for small companies, so the $250,000 phases out when a business purchases more than $800,000 in one year. Companies cannot write off more than their taxable income. Examples of qualifying leases would be a $1 buy out lease, an EFA and a 10% PUT.

  11. Wash Now, Pay Next Year • A deferral program that also includes Section 179 benefits, the Wash Now, Pay Next Year supplies a call to action for the customer: Act now or lose these benefits.

  12. Trial Closes • Mr. Customer, did you know that the equipment must be installed this year to qualify for the tax benefit? Are you clear that this is a use-it-or-lose-it benefit? • Mr. Customer, knowing that you need the equipment, and this tax incentive ends this year, what else is standing in your way? • Cash flow? • Budgetary constraints? • No purchasing this year? • Margins are thin? • Mr. Customer, we’ve agreed the equipment is right for you, and I’ve shown you how you can save money with the tax write-off. • So, the only hesitation is…(see above) • Mr. Customer, if we can get you the equipment you need, get the equipment installed, qualify you for the tax payment, increase your revenue with a new machine, and while doing all this postpone your payments until 2009, is there anything else standing in your way?

  13. FrontBack Section 179 Savings Calculator – Part of our marketing to stimulate fourth quarter business.

  14. www.patriotcapitalcorp.com

  15. Our Credit Application • One page credit app good for up to $150,000, for jobbers and dealers. • In most situations, the installation costs can be included in the lease. • Pre-funding, upon receipt of documents, up to 90% of the transaction amount. • Approvals can process in as quickly as a few hours, on average one business day.

  16. Kevin Van Kannel Geoff Smith Rob Pritts Doug Geis Bill Hickey Gordon Davis

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