Adam Jones sigs stolen during shipment

LPJNoob

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So, Have any of the stolen ones been recovered? Any arrests made? Any in pawn shops?
 

Lester

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I think he means that Gibson can write off the loss against its profits. This might be similar to what they did when they destroyed all of the surplus Firebird Xs. Since they did not sell them, they were a loss and their value was subtracted from their taxable income from profits. Just guessing, I am not a tax guy.

Not buying that. If you manufacture something you deduct the cost of the process / materials like any ordinary cost of production. If you sell the item, you have revenue, which may or may not exceed the cost of production. If you destroy them, you don't have any revenue - you can't take a loss for the alleged market value of the item.

If your suggestion was true, companies would be manufacturing items, setting a high MSRP, destroying them, and eliminating their net profit to avoid taxes on things they sold at a profit. Not happening.
 

Hecubus

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Did some Googling and apparently the 2017 Tax cuts suspended the ability to claim stolen property as a loss until 2026. Prior to that, Gibson could have deducted the fair market value of the guitars minus whatever insurance reimbursed.

As far as the Firebird X situation, it is unclear why they destroyed them from a business standpoint. It seems they could have donated them to a charity or non-profit and claimed a deduction. At the time, Gibson said they were destroyed because they were unsalvageable and therefore not fit for donation. Another article suggested the guitars were destroyed to "get them off the books". In any event you can be sure it was done to save Gibson money.

Apparently surplus destruction is a big industry with designer clothes and appliances as primary customers. Get rid of the old to increase demand for the new.
 

Lester

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Apparently surplus destruction is a big industry with designer clothes and appliances as primary customers. Get rid of the old to increase demand for the new.

At Digital Equipment Corp back in the day, all the internal users always wanted the latest in computer hardware in their systems room or on their desk. We always got it. After all, it cost relatively little to actually manufacture - the real cost was in development, engineering, production facilities, etc. We'd already bought in on that. The incremental cost per item was irrelevant if it helped us generate even more profit. So, there was millions of retail dollars in equipment that was no longer wanted inside the company - annually.

It was all sent to be crushed: Management didn't want it on the used market discouraging new equipment sales.
 

rockstar232007

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Did some Googling and apparently the 2017 Tax cuts suspended the ability to claim stolen property as a loss until 2026. Prior to that, Gibson could have deducted the fair market value of the guitars minus whatever insurance reimbursed.

As far as the Firebird X situation, it is unclear why they destroyed them from a business standpoint. It seems they could have donated them to a charity or non-profit and claimed a deduction. At the time, Gibson said they were destroyed because they were unsalvageable and therefore not fit for donation. Another article suggested the guitars were destroyed to "get them off the books". In any event you can be sure it was done to save Gibson money.

Apparently surplus destruction is a big industry with designer clothes and appliances as primary customers. Get rid of the old to increase demand for the new.
I'm pretty sure that if Gibson would have donated whatever FB-Xs they had left, they would have been destroyed anyway?
 

ARandall

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TRUTH TOLD.
Not according to any accounting rules.

Your 'loss' is that you don't make any money from them by selling, but you still have the production costs. Hence you make less profit than you otherwise would have if they were sold. Its all internal and there is zero ability to make any specific claim of an offset.
Its not like you have another business that is making a loss overall, and you can swoop in and offset that external loss against profit you make on the more profitable business.
 

Hecubus

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Not according to any accounting rules.

Yes. I clearly had my head up my a$$ with my speculation and was misremembering the details of the Firebird X saga. Since you have some accounting knowledge, can you shed some light on what Gibson's motivation may have been here?

"According to the former employee, Gibson chose to destroy a large amount of Firebird X guitars, after the model was met with poor sales. “Gibson literally could not sell these guitars and they were on the books,” Wilkes explained to YouTube channel Guitologist. He added that the company’s new investors were “trying to clean up the mess before the end of the fiscal year.”

I don't get the whole ”get them off the books” concept.

Sorry this digression has nothing to do Adam Jones or stolen guitars.
 

ARandall

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Not sure about the firebird debacle.......thats a whole other saga and nothing to do with the conversation you quoted.

Personally I don't get the purpose of destroying the guitars.....at all.
Surely if you give them away to music schools, or send them to less privileged countries so disadvantaged kids could use them that would have been a much more wholesome/morally sound way of dealing with them. It would be easy enough to record serial numbers for each guitar given away for tracking/locating.
I'm not sure about the donation laws with regard to companies. And what value you could claim with regard to charitable giveaways (assuming it goes to a registered charity). Its not like you're giving money away that has a set value.
 

DigitalTone

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Did some Googling and apparently the 2017 Tax cuts suspended the ability to claim stolen property as a loss until 2026. Prior to that, Gibson could have deducted the fair market value of the guitars minus whatever insurance reimbursed.

As far as the Firebird X situation, it is unclear why they destroyed them from a business standpoint. It seems they could have donated them to a charity or non-profit and claimed a deduction. At the time, Gibson said they were destroyed because they were unsalvageable and therefore not fit for donation. Another article suggested the guitars were destroyed to "get them off the books". In any event you can be sure it was done to save Gibson money.

Apparently surplus destruction is a big industry with designer clothes and appliances as primary customers. Get rid of the old to increase demand for the new.
Plus, with designers, it keeps a level of scarcity.
 

mudface

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Not sure about the firebird debacle.......thats a whole other saga and nothing to do with the conversation you quoted.

Personally I don't get the purpose of destroying the guitars.....at all.
Surely if you give them away to music schools, or send them to less privileged countries so disadvantaged kids could use them that would have been a much more wholesome/morally sound way of dealing with them. It would be easy enough to record serial numbers for each guitar given away for tracking/locating.
I'm not sure about the donation laws with regard to companies. And what value you could claim with regard to charitable giveaways (assuming it goes to a registered charity). Its not like you're giving money away that has a set value.

I bet the few FX's out there are more valuable because of the demise of it's sisters and brothers........ though i wouldn't buy one. I don't even like regular Firebirds.
 

VictorB

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