[Anonymous]

So section 179 allows an expense of $25K (max) in lieu of depreciation for items purchased during the year. My question related to existing assets. Those just continue on with their normal methods of depreciation, correct?

Also, for assets that you take the $25K expense for, do they essentially hit the tax return twice: once as a regular expense, and then again when you use the $25K expense in lieu of depreciation? I am probably really overthinking this…

[Alex]

The 25k max is a limitation for states generally. There are other limitations though, such as $500k max for 2014, and 179 can not be greater than NI. For assets you take 179 on, you depreciate any basis over the amount of 179 taken, over the useful life. This will not hit the return twice. Here is some good reading about it:

https://www.irs.gov/publications/p946/ch02.html

AUD - 78
BEC - 79
FAR - 75
REG - 76

Ninja 10 Point Combo

REG-74, 76
AUD-09/08/16
FAR-TBD
BEC-TBD

[Anonymous]

Thanks Alex! That was super helpful! I need to remember to check the code!

[thehip41]

179 IS depreciation.

It's depreciation expense in the current year, and it lowers the base for future depreciable years.

FAR - 83
AUD - 73 92
BEC - 83
REG - 88

Licensed CPA in the state of Michigan

[Gatorbates]

If you're depreciating it, it's not an expense, and never hits the income statement in the first place. It hits the balance sheet.

Licensed Florida CPA:
B: 71, 73, 79
A: 83
R: 78 (expired), 77
F: 74, 74, 80

It's finally freaking over.

[stoleway]

@Gatorbates…huh?

Long time my friend, I disagree with your comment above:)

Section 179 affects both B/S AND I/S

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[Author]

Replies