Friday, May 7, 2010

Tax Code Allows Rappers To Write Off Bling

You've GOT to be kidding me.

April 16, 2010 11:31 a.m. by Andrew Winistorfer
I always wondered how even the lowest tier rappers could afford chains that are worth more than my car. Apparently, thanks to their CPAs, they can write off bling purchases because, according to this article over at Plentii, it's part of maintaining their "brand." The article is pretty interesting in its depth of how basically rappers can write off anything they buy with a little creativity. Here's a little excerpt:
Rappers can deduct the cost of touring. They can deduct touring costumes, extravagant music videos, and insane home studio equipment. They can amortize the home studio itself. Moreover, Catalano says they should deduct their expenses or they have to give that money to the tax man. 
It's a pretty simple scenario: say, you're an underground rapper who suddenly hits big. You get a $50,000 royalty check one week and now you're looking at perhaps $20,000 in tax liability to Uncle Sam. 
“I never recommend a client spend money just to get rid of taxes. You want to reduce taxes with expenditures that''ll expand your business,” says Catalano. “Buy the future, if you can. Ask yourself, 'Is there something I can do for the next record or promotion, the next video, to help me make more money next year or the ensuing years?'”
I suppose it makes sense to an extent. If the bling is part of a costume to maintain an image than there's a rationale for claiming it's just as valid a business deduction as a new head for the the Boston Ballet's Rat King costume. The problem is, no one is wearing the Rat King's head to a club Saturday night. It really IS a costume and not part of daily attire. If worn outside of performances bling becomes more of a home office style expense, where I can see the IRS deciding only a percentage of the bling's purchase could be deducted.

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