Tax question: Section 179 property depreciation

Discussion in 'Taxes and Accounting' started by CoolTrader, Sep 29, 2006.

  1. On form 4562, I can elect to depreciate part of section 179 property, i.e. computer equipment in my case. Can I elect NOT to depreciate any mount this tax year, and depreciate all of them next year? It seems the tax law allows to you to decide the amount of depreciation. Thanks in advance.
  2. The default method is to depreciate computers over 5 years using MACRS.

    The optional election that a taxpayer can make in certain circumstances, under Sec 179, is to take some or all of the cost of the current year acquisition as a current year deduction.

    Sec 179 is a one shot election, it is only available in the year the item is put into businezss use. Extra unused Sec 179 taken, but not deducted because of a limitation, is carried forward to the following year(s) until the limitations allow its deduction.

    The taxpayer makes "a promise" to the IRS to keep the property in the same business use for 5 years. Take it out of business use and you must pay the IRS back the Sec 179 deduction taken.

    The taxpayer can fail to depreciate the equipment, but this is a technical violation of the "allowed or allowable" rule. (search Google for "allowed or allowable" for an explanation of this and all of its various complications and recent changes).
  3. what about if you filed sectiion 179 on a computer and 2 yrs later the mother board fries(rendering the computer useless), when i get a new computer can i file section 179 again?
  4. yes