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Ask A CPA - Small Business Services

Purchased Of New Business Equipment - 1st Year Write Off

Most new business equipment can be either depreciated over its useful life or expensed immediately under Internal Revenue Code Section 179. For a tax year beginning in 2012, the Code Sec. 179 expensing election is reduced to $139,000, with a $560,000 investment-based ceiling (down from $500,000/$2 million). For tax years beginning after 2012, it will be further reduced to $25,000 with a $200,000 investment-based ceiling. For a tax year beginning after 2011, expensing can no longer be claimed for qualified real property. Generally qualifying property is:Tangible personal property (such as machines, equipment, furniture). Certain other tangible property used for specific purposes. Single-purpose agricultural or horticultural structures.Certain storage facilities. Railroad gradings or tunnel bores.

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