last update 5-01-2010
2010 Section 179 Expensing
Generally, taxpayers may elect under Code Sec. 179 to deduct (or
"expense") the cost of qualifying property used in their business, rather than recover those costs through depreciation
deductions. Under prior law for 2010, the maximum amount that a taxpayer may expense wass $125,000 of
the cost of
qualifying property placed in service for the tax year. This amount is reduced (although not below
zero) by the amount by which the cost of qualifying property placed in service during the tax year
exceeds $500,000 (the "investment limitation"). These amounts are adjusted annually for inflation.
In general, QUALIFYING PROPERTY is depreciable tangible personal property that is purchased for use in
the active conduct of a business or trade. The amount that may be expensed is limited to the taxable
income for the tax year that is derived from the trade or business.
The 2010 HIRE Act increases for one year the amount a taxpayer may deduct under Code Sec. 179. For
tax years beginning in 2010, the amount that may be deducted is $250,000 of the cost of qualifying
property. This is reduced (although not below zero) by the amount by which the cost of qualifying
property placed in service during the tax year exceeds $800,000.
Without further legislation, the dollar and investment limitations for tax years that begin in 2011 will
be $25,000 and $200,000, respectively, and will not be indexed for inflation going forward. In
addition, the dollar and investment limitations will no longer be indexed for inflation.
======================== WARNING =======================
This information is provided for the reader's benefit in
becoming familiar with the legal matters discussed. Your
particular facts may be different from the points above.
You should not rely on the above data without consulting a
attorney to discuss the specific facts of your case
and the law of your state.
If you live in Louisiana and want to talk about your situation, please
call me at the number below. Fees will be charged after initial consultation.
Marvin E. Owen
3036 Brakley Drive
Baton Rouge, La 70816
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