A taxpayer may elect to expense the cost of any section 179 property and deduct it in the year the property is placed in service. The "Tax Cuts and Jobs Act" increased the maximum deduction from $500,000 to $1 million. It also increased the phase-out threshold from $2 million to $2.5 million. For taxable years beginning after 2018, these amounts of $1 million and $2.5 million will be adjusted for inflation. Any remaining cost may be depreciated according to MACRS as described in item 2.305. The immediate deduction constitutes a tax expenditure, resulting in a deferral of tax or an interest-free loan.
Origin: IRC § 179
Tax Type
Tax Expenditure
Item Number
Item Name
Description
Origin
FY2017
FY2018
FY2019
FY2020
FY2021
Personal Income Tax
Accelerated Deductions from Gross Income
1.305
Deduction for Excess First-Year Depreciation
A taxpayer may elect to expense the cost of any section 179 property and deduct it in the year the property is placed in service. The "Tax Cuts and Jobs Act" increased the maximum deduction from $500,000 to $1 million. It also increased the phase-out threshold from $2 million to $2.5 million. For taxable years beginning after 2018, these amounts of $1 million and $2.5 million will be adjusted for inflation. Any remaining cost may be depreciated according to MACRS as described in item <a href="/tax-expenditure-budget/corporate-excise-tax/accelerated-deductions-from-gross-income/2-305">2.305</a>. The immediate deduction constitutes a tax expenditure, resulting in a deferral of tax or an interest-free loan.
<a href="http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00000179----000-.html" target="_blank">IRC § 179</a>
110.2
119.1
126.3
124.7
123.9
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