Sec. 179 allows a taxpayer to elect to deduct the cost of certain types of property on their income taxes as an expense, rather than requiring the cost of the property to be capitalized and depreciated. This property is generally limited to tangible, depreciable, personal property which is acquired by purchase for use in the active conduct of a trade or business.
Before the Protecting Americans from Tax Hikes (PATH) Act of 2015, the aggregate cost a taxpayer could elect to expense under Sec. 179 was $250,000 annually. PATH permanently removes the $250,000 limitation of qualified real property for tax years beginning after December 3, 2015. The overall Sec. 179 limit of $510,000 (for 2017) continues to apply, as well as the dollar-for-dollar phase out threshold of $2,030,000 (for 2017).
PATH also allows taxpayers to carry forward certain qualified real property expenses, such as amounts excluded due to active business limitations. Expenses attributable to qualified real property placed in service beginning in 2016 can now be carried to later tax years. Feel free to contact me if you have questions at 610.828.1900 or Marty.McCarthy@MCC-CPAs.com. I am always happy to help.