For tax years 2015 and thereafter, a taxpayer may immediately expense up to $25,000 of Section 179 property
annually, with a dollar-for-dollar phase-out of the maximum deductible amount for purchases in excess of $200,000.
The bill makes permanent the $500,000 allowance for expensing depreciable business property (section 179 property
) as well as the $2 million threshold after which the amount of the allowance is reduced.
Under IRC section 179, a taxpayer may elect to immediately write off any IRC section 179 property
as an expense in the taxable year in which the property is placed in service.
Section 179 property
is depreciable personal property when purchased for use in the active conduct of a trade or business.
It is important to note, the $250,000 amount provided under the new law is reduced if the cost of all section 179 property
purchased and placed in service by the business during the tax year exceeds $800,000.
This limit is reduced by the amount by which the cost of Section 179 property
placed in service in the tax year exceeds $800,000.
This property is frequently referred to as section 179 property
, after the relevant section in the Internal Revenue Code.
Under our present tax laws, retailers may choose to treat expenditures for qualifying property, called Section 179 property
, as an immediately deductible expense rather than as a capital expenditure.
[paragraph] boosting the small-business expensing allowance to $100,000 until 2006 for "Section 179 property
" (business equipment and some software), and
Section 179 property
does not include any property described in Section 50(b) or air conditioning or heating units.
Businesses adding more than $200,000 of IRC section 179 property
during the year must reduce the maximum election dollar for dollar above $200,000.
Also extended would be increased expensing limitations and treatment of certain real property as Section 179 property
. The provision extends the small-business expensing limitation and phase-out amounts in effect from 2010 to 2013 ($500,000 and $2 million) to property placed in service during 2014.