Introduction

This chapter discusses the section 179 deduction. The section 179 deduction is a means of recovering the cost of property through a current deduction rather than through depreciation.

The chapter contains the following parts.

• Section 179 Deduction Defined. This part defines the section 179 deduction.
• What Costs Can and Cannot Be Deducted. This part discusses which portion of the cost of property acquired by purchase or trade can be deducted. It also identifies property that qualifies for the deduction, and property that does not qualify for the deduction.
• Electing the Deduction. This part discusses the section 179 placed-in-service rule, how to make and revoke the election to take the section 179 deduction, and recordkeeping requirements.
• How To Figure the Deduction. This part discusses how to figure the section 179 deduction. It discusses the three limits affecting the deduction: the maximum dollar limit, the investment limit, and the taxable income limit.
• When To Recapture the Deduction. This part discusses when and how to recapture the section 179 deduction. It also provides examples to help you figure the recapture.

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