Small Business Taxes & Management


Section 179 Expensing Election


Small Business Taxes & ManagementTM--Copyright 2018, A/N Group, Inc.


___ Qualifying property definition (generally tangible personal; see exceptions)
___ Qualified leasehold, retail, restaurant improvement property
___ Improvements to nonresidential real property after original property placed in service; roofs, fire protection, alarm systems, HVAC; T/Y/B after Dec. 31, 2017
___ Trade or business active conduct requirement
___ Taxable income limitation for business (salary add back)
___ Basis adjustment (if depreciating part of cost)
___ Annual dollar limitation
___ Investment limitation
___ Common control other entities
___ Election, adequate property identification
___ Election on original return or amended before due date
___ Elect on part of property
___ Carryforward under income limitation
___ Consider effect on other shareholders/partners/members
___ Married filing separately lower limitation
___ Noncorporate lessor restrictions
___ Placed in service date
___ Tangible personal property
___ Long-lived property first pick
___ AMT (alternative minimum tax)
___ Mid-quarter convention
___ Tax bracket analysis
___ Multi-year tax analysis
___ Acquired only by purchase (no contribution to new entity)
___ Related party transactions
___ Like-kind exchange rules
___ Luxury vehicle limitation
___ Sport utility limitation (see below)
___ Recapture on disposition
___ Recapture on conversion to personal use (50% or greater)
___ Passthrough entities report on shareholder/partner/member
___ Business use more than 50% in placed in service year
___ Off-the-shelf computer software
___ Property converted from personal to business not qualifying
___ Transient lodging rules
___ De minimis expensing safe harbor vs. 179
___ Election on Form 4562; recapture on Form 4797
___ Special rules for disaster assistance property, empowerment zone, renewal community, New York Liberty Zone

Note 1. Other tangible property (not most buildings and structural components) that is:

Other qualifying property includes single-purpose agricultural or horticultural structures.

Note 2. There are special rules for trucks and SUVs. The entire cost of a pickup truck qualifies if the bed is at least six feet long and the GVWR of the vehicle is in excess of 6,000 pounds. Vans qualify if there is no seating rearward of the driver's seat and has no body section protruding more than 30 inches ahead of the leading edge of the windshield. Passenger vans with a seating capacity of 9 persons or less behind the driver's seat are subject to a $25,000 limitation ($25,500 for 2019). Check the rules carefully.


Copyright 2018 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Articles in this publication are not intended to be used, and cannot be used, for the purpose of avoiding accuracy-related penalties that may be imposed on a taxpayer. The information is not necessarily a complete summary of all materials on the subject. Copyright is not claimed on material from U.S. Government sources.--ISSN 1089-1536

Return to Index

--Last Update 12/26/18