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Section 179 Deduction | Non Qualifying Property

While most equipment that small businesses lease or purchase will qualify for the Section 179 Deduction, there are some exceptions.

Although we have attempted to provide you with a basic list, if you have any questions about your property or equipment qualifying for the Section 179 Deduction, please see the IRS website or consult your tax preparer regarding your question.

List of Section 179 Non Qualifying Property

As we previously mentioned, most equipment will qualify for the Section 179 Deduction. Some of the property and equipment that does not qualify for the Section 179 Deduction is listed below.

  • Real Property does not qualify for the Section 179 Deduction. Real Property is typically defined as land, buildings, permanent structures and the components of the permanent structures (including improvements). Other examples of property that would not qualify for the Section 179 Deduction include paved parking areas and fences.
  • Air conditioning and heating equipment is generally not eligible for the Section 179 Deduction.
  • Property used outside the United States generally does not qualify for the Section 179 Deduction.
  • Property that is used to furnish lodging is generally not qualified for the Section 179 Deduction.
  • Property acquired by gift or inheritance, as well as property purchased from related parties does not qualify for the Section 179 Deduction (No, you can't sell equipment to yourself and qualify for Section 179).
  • Any property that is not considered to be personal property, may not qualify for the Section 179 Deduction.
  • Used Equipment (that is new to you) qualifies for Section 179, however used equipment does not qualify for Bonus Depreciation.

Expiration Notice: The 'Small Business Jobs & Credit Act of 2010' allowed taxpayers to expense up to $250,000 of the cost of qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property. This provision has expired and no longer available to small business owners, so please bookmark this page and check back regularly for possible updated details.

Complying with Section 179

If you are not sure whether or not your property or equipment should be considered Personal Property or Real Property, please consult your tax preparer to ensure that you are complying with IRS §179. While the Section 179 Deduction offers a tremendous advantage to small businesses across the country, it is up to you to ensure that any deductions you are taking are within the legal requirements of Section 179.

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This website was designed to answer your questions regarding the Section 179 Tax Deduction, and to explain the impact the various Stimulus Acts have had on Section 179. The information on this site will clearly explain the Section 179 Deduction in plain terms; will go over what property qualifies under Section 179 for the deduction; and will explore the myriad of ways the Section 179 deduction can impact your bottom line. In addition, there are IRS tax forms and also tools for you to use, such as the free Section 179 Deduction Calculator currently updated for the 2013 tax year.