Q:

Subject: Sec. 179 question

 A "Sec. 179" Google search got me to your website and since you're the Tax Guru I was wondering if you might answer a (hopefully) quick question.  I've read that the 50% Sec. 168 deduction is optional and that sometimes it is favorable to take it at 30% and other times not take it at all.  I take it 168 deductions can not be carried forward like 179 deductions so taking it in a loss year would be like throwing it away?  Can you affirm or clarify this issue for me?  Also, is it ever unfavorable to take the entire allowable 179 deduction.  Why would it be if one can carry forward the deduction?

Okay, I know, that's two questions.  Any feedback would be appreciated.

Thx,

A:

 You don't lose anything if you opt not to claim any or all of the Section 179 or first year bonus depreciation.  That just leaves more cost basis to be claimed in future years either as depreciation or as cost basis when the asset is sold.  I frequently choose not to claim any of those extra first year deductions if we already have plenty of other deductions. This saves more for future deductions.

I hope this helps you understand.  Any good tax pro should be able to help you fine-tune the depreciation & Sec. 179 deductions you claim in order to give you the overall best tax savings.

Good luck.

Kerry Kerstetter

Labels: 179

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 3/19/2005 05:33:00 PM Send this post: