Section 179 Property
Section 179 property is property that you acquire by purchase for use in the active conduct of your trade or business, and is one of the following. Tangible personal property, including cellular telephones and similar telecommunications equipment. Qualified section 179 real property. For more information, see Special rules for qualified section 179 real property, later. Other tangible property (except buildings and their structural components) used as:
An integral part of manufacturing, production, or extraction or of furnishing transportation, communications, electricity, gas, water, or sewage disposal services;
- A research facility used in connection with any of the activities in (1) above; or
- A facility used in connection with any of the activities in (1) above for the bulk storage of fungible commodities.
- Single purpose agricultural (livestock) or horticultural structures.
- Storage facilities (except buildings and their structural components) used in connection with distributing petroleum or any primary product of petroleum.
- Off-the-self computer software placed in service before January 1, 2015.
Section 179 property does not include the following.
- Property held for investment (section 212 property).
- Property used mainly outside the United States (except for property described in section 168(g)(4)).
- Property used mainly to furnish lodging or in connection with the furnishing of lodging (except as provided in section 50(b)(2)).
- Property used by a tax-exempt organization (other than a section 521 farmers' cooperative) unless the property is used mainly in a taxable unrelated trade or business.
- Property used by a governmental unit or foreign person or entity (except for property used under a lease with a term of less than 6 months).
- Air conditioning or heating units.
See the instructions for Part I and Pub. 946.
Special rules for qualified section 179 real property. You can elect to treat certain qualified real property placed in service during the tax year as section 179 property. See Election for certain qualified section 179 real property in Part I for information on how to make this election. If the election is made, the term "section 179 property" will include any qualified real property which is:
- Qualified leasehold improvement property as described in section 168(e)(6),
- Qualified restaurant property as described in section 168(e)(7), or
- Qualified retail improvement property as described in section 168(e)(8).
This property is considered "qualified section 179 real property."
The maximum section 179 expense deduction that may be expensed for qualified section 179 real property is $250,000 of the total cost of all section 179 property placed in service in 2014. A 2013 deduction attributable to qualified real property which is disallowed under the trade or business income limitation (see Business Income Limit in chapter 2 of Pub. 946) is carried over to 2014. The carryover amount from 2013 (or a portion of the amount) not deducted in 2014 is considered placed in service on the first day of the 2014 tax year. Thus, any such amounts that are not deducted in 2014, plus any 2014 disallowed section 179 expense deductions attributable to qualified section 179 real property, are treated as property placed in service on the first day of 2014 for purposes of computing depreciation (including the special depreciation allowance, if applicable). Any of these amounts will not be reported on line 13 of Form 4562. They will instead be reported on the appropriate line under Part II or Part III of Form 4562. For more information on qualified section 179 real property, see section 179(f) and Pub. 946. Also, see Notice 2013-59.