MARK KOHLERMain Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, LLC · Owner at Main Street Professionals, LLC

Equipment Rentals Create Major Tax Write-Offs

18 Mar 2026 · 1 min

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Mark Kohler explains how renting out heavy equipment like excavators and trucks to other contractors can create major tax write-offs. The key: rentals must go to third parties, and you need to meet one of seven material-participation tests. That switch turns capital losses into ordinary deductions, multiplying your tax benefits.

Chapters

I'm going to go buy an expensive excavator or a truck or some front loader or something in the construction industry, and you're going to buy this equipment and rent it to other contractors, or you're going to buy mining rigs and put it in a crypto mine scenario. Okay, same concept. It's all assets and you're going to rent them to other people, not to yourself. So it can't be a self-rental. You're going to rent this equipment to someone else or make money off of it. Well, there's 7 ways that you could qualify as material participation, and if you can show that you check the box on one of those 7, you just morphed all that, those write-offs into ordinary write-offs.