Section 179 in 2010
2010 Section 179 Information
This page will help those that filed an extension and still need to prepare a 2010 tax return.
The 2010 amended Internal Revenue Code Section 179 allows a business the ability to deduct the total cost of qualified tangible property up to $500,000, as long as that business spent less than $2 million on qualified property in 2010, and the assets were placed in use by December 31, 2010.
If a small business spent over $2,000,000 on equipment in 2010, each dollar over $2,000,000 reduces the maximum Section 179 deduction by that dollar (dollar for dollar).
For example, if the business spent $2,025,000 ($25,000 over the limit), the deduction maximum for 2010 would be reduced by $25,000. In this example, the business could deduct up to $475,000 of the cost of new equipment for 2010 (instead of $500,000).
Here’s an excellent 2010 Section 179 Calculator.
The list of qualifying property has not changed in 2010, and most business equipment (as well as certain storage structures) qualifies for the Section 179 expensing allowance. Business vehicles with a gross vehicle weight over 6,000 pounds qualify, but see the Section 179 and business vehicles section for special requirements.
The Section 179 deduction amount is not allowed to reduce taxable income below zero. However, any remaining amount of business equipment purchased in 2010 can still elect Bonus Depreciation or be depreciated using conventional depreciation tables. 1st year Bonus Depreciation is limited to 50% for assets acquired before Sep 8, 2010, and 100% after Sep 8, 2010.
A properly structured equipment loan or equipment lease allows your business to take advantage of the expensing allowance afforded by Section 179. All of the above principals and standards apply. Contact your equipment leasing company or Crest Capital to verify that your financing meets the requirements. We have additional information regarding Section 179 and Loans/Leases.