title>Tax Guru-Ker$tetter Letter Wizard Animation

                 

Tax Guru-Ker$tetter Letter
Tuesday, November 20, 2007
 
Sec. 179 Limits


Q:



For 2007 the 179 deduction threshold is $125,000 correct??  What happens after the threshold can it be carried forward next year??

 

Thanks

 


A:



I do have a chart of the Section 179 limits for every year from 2002 to 2011 on my website. 

If I understand your question properly, you are asking if a business buys more than $125,000 of new equipment during 2007, can the excess be carried over to 2008 and applied against the $128,000 limit for that year?

The answer to that is a very big NO.  The 2008 Section 179 deduction may only be claimed for equipment purchased and placed into service during 2008.  Any excess of 2007 asset purchases over the $125,000 limit will have to be depreciated normally.

An additional twist to this situation depends on how much more than $125,000 of new equipment was purchased during 2007.  If the total of new equipment acquired during the year is over $500,000, the $125,000 limit for the 2007 Sec. 179 deduction starts to be phased out.

I hope I understood your question properly.  If I missed your point, please clarify it for me.

Kerry Kerstetter


 

Business Plan Pro

 

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- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 11/20/2007 09:42:00 AM Send this post:

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