What Property Does Not Qualify for the Section 179 Deduction?
The Section 179 Deduction is a great way for small business owners to invest more into their companies while getting tax breaks on equipment. Similar to all government programs, however, there are certain rules that must be followed. Here is a list of rules for property that cannot be claimed under the section 179 deduction:
Land and Improvements
This means you cannot claim land purchases or land improvements under the Section 179 Deduction. Land Improvements includes things like swimming pools, fences, pavement, or bridges.
Property used outside of the United States
Property used by tax exempted organizations unless for producing a taxable income
Property used by government units
Heating or air conditioning Units
Property for leasing
Unless you are a leasing corporation
Unless you manufacture property for leasing purposes
Property used for lodging
Unless used by a hotel in relative to the business
Unless it is a historic site
Unless it is considered “Energy Property” which means it is solar powered or is used to produce or distribute energy
As long as your property doesn’t fall into one of these descriptions, it can be claimed on your tax return under section 179.
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