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Discussion Forum Index --> Tax Questions --> Sec 179 Expense (Depreciation)
JR1 (talk|edits) said:
| September 13, 2006
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| *whistling* Bet it's in Sec. 179...or Reg 1.179....
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Aunger (talk|edits) said:
| 13 September 2006
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| Regarding Wilma GO Zone excess first year depreciation.
How and what property in what counties can this tax benefit be utilized
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Death&Taxes (talk|edits) said:
| 13 September 2006
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| Joe: Sec. 179(d)(1) does not contain the word 'new' in its definition of eligible property.
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JR1 (talk|edits) said:
| September 13, 2006
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| Agree with D&T. This, a footnote from BNA:
872 §179(d)(1); Regs. §1.179-4(a), T.D. 9209, 70 Fed. Reg. 40189 (7/13/05). The §179 expense deduction presumably is available for used equipment purchased and place in service during the taxable year, as long as the purchase is a qualified purchase, discussed below. Section 179 has no limiting language on original use beginning with the taxpayer that does appear in §168(k).
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Solomon (talk|edits) said:
| 13 September 2006
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| The key is purchased and placed in service during taxable year. One can not convert a personal asset to business use and take 179.
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Bayyoc (talk|edits) said:
| September 14, 2006
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| Solomon: Not even if the business purchased the asset from the shareholder?
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Solomon (talk|edits) said:
| 14 September 2006
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| Bay - I would not construe that as a conversion, but rather a purchase and placed in service.
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JRE (talk|edits) said:
| 14 September 2006
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| I would think you also have to jump the Placed in Service hurdle at Reg. 1.179-4(e)??
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Bayyoc (talk|edits) said:
| September 14, 2006
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| Are you saying assets purchased from a stockholder are not deductible under 179? If I have an old computer that I want to use for business, and my corp buys it from me at FMV, I (meaning the corp) couldn't take the 179 deduction? If I read 1.179-4(c) correctly, that's what it sounds like (though the example in (c)(ii) mentions property purchased BY a SH FROM a corp, not vice versa.)
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JR1 (talk|edits) said:
| September 14, 2006
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| I've always understood it that way...that property brought over from personal use, no matter how, will not qualify for 179.
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Jdugancpa (talk|edits) said:
| 15 September 2006
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| It's the "related-partyness" that causes the problem, not the fact that it is used. JR can buy my lawn mower for his new lawn car business and deduct 179, even though in my hands it has personal use.
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Bayyoc (talk|edits) said:
| September 15, 2006
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| There is a fine line here. I have purchased plenty of business stuff, including a new computer, with personal funds (meaning, technically, I owned it personally), and simply took the money out of the register when I got to work. Would this cause problems with 179? If not, what would cause the problem with the USED computer scenario--the fact that it was actually used for personal use?
I can't see the IRS making a stink over little things that are legitimately used for business. If you sold a $50,000 tractor to your shoe store, then that's completely different.
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JR1 (talk|edits) said:
| September 15, 2006
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| That's different, Bayyoc. There, you're buying it for the company and getting reimbursed. Timing's everything I guess..
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Jdugancpa (talk|edits) said:
| 15 September 2006
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| "new lawn car business"?? What was I smoking?
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SCorpNewbee (talk|edits) said:
| 31 December 2007
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| Jdugan - Now I find this posting where you address the "related partyness" that disallows property bought for an S Corp with S/H personal funds and reimubursed to S/H as loan, but done well in advance of S Corp's formal existance as why my client's former preparer did not elect Sec 179 deducts for my clients S Corp equip on their 2006 1120S. My orig posting inquired as to the Busines Income limitation as the reason why the preparer didn't apply Sec 179 for my client. But I think this posting here may be the real answer!
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Denver3883 (talk|edits) said:
| 1 January 2008
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| I just found this thread. I've been wondering what constitutes "purchase from a shareholder". i am working with a client who bought a big piece of equipment right around the time of the inception of the business. Now, does it have to be r-e-g-i-s-t-e-r-e-d under the company's name for purposes of 179 deduction?
and while i am on it, let me ask you another question. one of the shareholders bought a new truck and has been using it for the business. he also uses it personally. for the purposes of the basis when contributing mixed-use property, do i count the percentage of the business use?
Thanks
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