Starting in year 2015, the Section 179 deduction limit in now permanent at $500,000 with the investment limit at $2,000,000 and indexed for inflation. If the total cost of Section 179 property exceeds the investment limit, the available Section 179 deduction is reduced by the amount of the excess (but not below zero). Amounts disallowed because of the investment limit may not be carried over. However, if the business income limit prevents a business from deducting all or part of the cost of Section 179 property, the disallowed amount is carried over to the next tax year.
Off-the-shelf software eligible for Section 179 is also now permanent.
A Section 179 deduction made may be revoked or modified without IRS approval by filing an amended tax return. Once revoked, the election cannot be reinstated.
Carryover of Section 179 attributable to qualified real property provision is now permanent.
If you would like to learn more about this tax strategy, please call Susan at 847.895.9880.