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Comment by fishtoaster | Hacker News Reader

Sounds like this is the result of "accelerated depreciation." As far as I can tell, that's a strategy that ultimately allows you to pay less tax one year and more tax in a later year. I don't have a strong feeling on the value of that particular tax law, but it seems somewhat less nefarious than the implied "not paying taxes at all."

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Others have pointed out the strategy allows for picking the best year to pay taxes and therefore avoiding a lot of taxes. I'd add to that argument that the current administration is likely to create exceptionally favorable policies for Tesla specifically so they really should burn every trick now since they are about to get a whole new bag of them. I can just see it now, legislation built for Tesla. Of course it will be named something like Save The Children Clean Air Tax Credit Act but it will apply to Tesla almost exclusively as a way to plow money towards loyalist.

That only works if you have a time machine or a crystal ball.

When those decisions were made, Tesla's CFO didn't know who'll win the election.

Trump will likely cancel the $7.5k EV credit so I don't see the "policies favorable to Tesla".

Trump was campaigning on renewing his previous corporate tax cuts and making more tax cuts. It's not a secret and not specific to Tesla.

I think this is a tax avoidance strategy that may save a lot on taxes. E.g. use accelerated depreciation to avoid taxes in a really profitable year and then if you have a loss or much lower profit in a subsequent year, you have successfully avoided a bunch of taxes. Not an accountant or tax lawyer so there may be a catch here.

That makes no sense, the integral of the tax credit is always the total value of the asset so it doesn't matter unless there are relevant tax brackets here? Businesses can also carryforward losses right?

> use accelerated depreciation to avoid taxes in a really profitable year

Tesla's earning calls tell me he should have just paid the taxes this year, in that case. Welp, hindsight.

I'm guessing in a different year the rate will be much lower: afterall, he gave away $1 million a day to a random registered republican voter in a key swing state to get around laws that prevent buying votes and paying people to register to vote.

That was with his money (you know richest person on the planet) and had nothing to do with Tesla.

I won’t argue it was with his own money, but everything a CEO does affects the company.

Ah I forgot his money has nothing to do with tesla and he doesn't run tesla or have a huge stake in it. And he in no way benefits from how future tax changes affect them, right?

Same amount of money now is worth more than in future

I think the quiet part here is

1. Companies see downwinds of a recession, so they want to wait for good times to do anything. Actually grow, pay off debts, make lateral moves.

2. companies were banking on administration changes to help bailed them out. So far, they seem to have won that gamble.

so there's general truth and then there's speculation about used to influence decisions.

Not an accountant but this is my understanding as well

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