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Comment by Simon_ORourke | Hacker News Reader

A friend of mine from a farming family in Europe once told me a story that his family would wait until the year one of his siblings was due to go to college and then invest in new farm machinery. Their reported net income for the year would reduce or go negative and the sibling would get to college effectively for free on a hardship tuition grant.

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At least in America, they usually look at the past 2-5 years of income to avoid these types of shenanigans.

In Canada, they use gross income instead of net income for student grants.

So, what happens if you work in an area where the cost are high but the margin is low? You might make $100K but have $85K in costs. You still have $15K in income. Does this apply to those self employed or only wage earners (gets a paycheck)?

In Austria, we just don't have tuition fees, which also avoids these types of shenanigans :)

Yep very common tactic for small business owning families.

Huh? Wouldn't they have to depreciate it over several years so only a fraction of it would be a deduction in the current? Or is the idea that they'd buy so much capital equipment that even the fraction they could depreciate that year would wipe out all the other income?

AIUI, the concept of depreciation exists in tax law precisely to prevent indefinitely deferring taxes via reinvestment (though it can't do anything about the portion of reinvestment going to pay salaries a la Amazon):

https://news.ycombinator.com/item?id=15061439

Many countries allow accelerated deprecation of designated equipment.

Here's the IRS's - https://www.irs.gov/newsroom/additional-first-year-depreciat...

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