I recently received this email from a very perceptive reader:

Great articles

Suggestion:  "their different businesses"  did you their different corporation.  A corporation may have various DBAs or business but only qualifies for 1 section 179 expense election.  Keep up the good work. 

More Deductions

As I have described elsewhere, the Section 179 expensing election is much more lucrative for owners of C corporations because they can literally multiply their total deduction by splitting their purchases of business assets among their different businesses.  With an S corp, the Section 179 deduction is limited to just the one amount.  Likewise, the deduction for net rental losses is magnified by using a C corp because it can use rental losses to offset all operating income.   An S corp's rental losses are subject to the restrictive passive loss rules.

 My response:

That is an excellent point.  I should have referred to different "business entities" (1040 Sole Proprietorships vs. 1120 Corporations) instead of the less descriptive different "businesses" because a single 1040 or 1120 could each contain several different and distinct businesses and the Section 179 deduction is limited to a total of $102,000 for the entire 1040 and $102,000 for the total 1120, along with similarly controlled 1120s (a related topic I will probably be discussing soon).  I also appreciate your copying & pasting the text from my site.  That made it easier for me to go in and make the correction. 

Thank you very much for your comments and please continue to point out examples that you notice where I may have said something  in a confusing or otherwise less than precise manner.  The last thing the tax game needs is more confusion.

Kerry Kerstetter

Labels: 179

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 12/03/2004 05:59:00 PM Send this post: