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Tax law rewards PC donors

Hey, business owner, want to help out your neighborhood school _ and get Uncle Sam to pick up most of the tab?

Deep in the folds of the Taxpayer Relief Act of 1997 lies an extraordinary break for businesses that donate personal computers to schools.

The new tax law allows benefactors to write off all of their original purchase price for a computer plus half of its present value.

The tax law gives business a powerful incentive to improve things for schools. Suppose you paid $2,000 for 1996-vintage PCs with a full complement of drives and cards. Let's be generous and say that your computers are worth $300 today.

Under the new tax law, you could deduct $2,150 from your taxable income for each computer you give to a school. The tax savings per PC, assuming you pay at the top corporate rate of 35 percent: $752.50.

Here is the sweet part: It won't cost you $2,000 to replace the computer with the latest technology. Business computers, following the trend in home PCs, are crashing through the $1,000 barrier.

You get three times the computer. Uncle Sam gets three-fourths of the bill.

The law is written to make sure school districts make out, too. The computer must be 2 years old or newer, and it must be new equipment either to the donor or to the school.

It's quite possible that schools would get brand-new hardware. The tax break is generous enough that manufacturers and retailers could give away dated inventory and recover as much in taxes as they would net in distress sales.