Talk:Section 179 depreciation deduction

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Untitled[edit]

Can this deduction be used when the business is already losing money in order to further that loss? I have a money-losing company, and some large capital gains. If I can offset my gains with my losses in this fashion, then I can go out and spend more money to improve my business at the same time as reducing my tax bill.

PS- this isn't some kind of racket- this is a real company with real sales etc...


Answer: No. If the business already has a loss, its net business income (NBI) is less than zero. Therefore, any 179 deduction claimed will be forced into the carryforward, not a current year deduction. Note: Individuals may use wages in their computation of NBI, and thus a Schedule C business with a loss (e.g.) may have a section 179 deduction up to the amount of wages or other businesses owned by the taxpayer (other limits notwithstanding). NBI is computed at the taxpayer level, not for each activity. 67.235.30.223 (talk) 21:03, 15 July 2015 (UTC)

Update Section 179 material[edit]

The Section 179 material needs to be updated for the tax legislation passed in May 2007

Uncle Joe CPA 22:17, 13 September 2007 (UTC)

Current 179 limits[edit]

The current limits for 2011 are $500,000 of expensing, phased out for acquisitions exceeding $2,000,000. See PL 111-240 section 2021. For 2012, expensing is up to $125,000 with phase out starting at $500,000, and for years after 2012 it is $25,000 with phase out at $200,000, per PL 111-312. The anon. IP editor's version of the law is not up to date. I have reverted. Text of these laws follows:

P.L. 111-312: Law Sec. 402. TEMPORARY EXTENSION OF INCREASED SMALL BUSINESS EXPENSING. (a) Dollar Limitation. Section 179(b)(1) is amended by striking 'and' at the end of subparagraph (B) and by striking subparagraph (C) and inserting the following new subparagraphs: '(C) $125,000 in the case of taxable years beginning in 2012, and (D) $25,000 in the case of taxable years beginning after 2012'.

402(b)(b) Reduction in Limitation. Section 179(b)(2) is amended by striking 'and' at the end of subparagraph (B) and by striking subparagraph (C) and inserting the following new subparagraphs: '(C) $500,000 in the case of taxable years beginning in 2012, and (D) $200,000 in the case of taxable years beginning after 2012.'. ...

(f) Effective Date. The amendments made by this section shall apply to taxable years beginning after December 31, 2011.

..

P.L. 111-240: Law Sec. 2021. Increased expensing limitations for 2010 and 2011; certain real property treated as Section 179 property. (a) Increased limitations. Subsection (b) of sec tion 179 of the Internal Revenue Code of 1986 is amended (1) by striking 'shall not exceed' and all that follows in paragraph (1) and inserting 'shall not exceed (A) $250,000 in the case of taxable years beginning after 2007 and before 2010, (B) $500,000 in the case of taxable years beginning in 2010 or 2011, and (C) $25,000 in the case of taxable years beginning after 2011', and

(2) IRC by striking 'exceeds' and all that follows in paragraph (2) and inserting 'exceeds— (A) $800,000 in the case of taxable years beginning after 2007 and before 2010, (B) $2,000,000 in the case of taxable years beginning in 2010 or 2011, and (C) $200,000 in the case of taxable years beginning after 2011.'. ...

(f) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after December 31, 2011.

Oldtaxguy (talk) 23:29, 12 December 2011 (UTC)