Groups : Practitioner to Practitioner

Reply to Topic
  • Share:

Section 179 for Fiscal Year End Taxpayers

Posted on
Craig Rubin
Craig Rubin

I have a client that is a September 30, 2014 year end.  His year begins in 2013 in October when the maximum amount is $500,000 and ends in September 2014 when the maximum amount is $25,000.  If he buys $250,000 worth of qualifying machinery in Decembe 2013 and nothing for the rest of the year, how much of section 179 can be claimed on his next years return?

Replied on
Brian Huber
Brian Huber

The Section 179 deduction depends upon the date an asset is placed in service, which you do not provide. However, the answer I believe you are seeking is determined by remembering that the deduction under Section 179 is based upon when the fiscal year begins. In your example, the maximum amount for the fiscal year that began in October 2013 is $500,000. I presume this client is a regular C corporation. Obviously, pass through of Section 179 from an S corporation is limited to the calendar tax year of the individual shareholders.

Reply to Topic 
Replied on
Craig Rubin
Craig Rubin

The equipment would be bought in December 2013 for $250,000 and placed in service at the time of purchase. Would equipment purchased and placed in service in February of 2014, I assume would not qualify.
Reply to Topic 
Replied on Edited on
Brian Huber
Brian Huber

You have the wrong assumption about equipment placed in service during February 2014 if, as I noted, the taxpayer is a C corp with a fiscal year that began in October 2013.

Reply to Topic 
Replied on
Jim Tombor
Jim Tombor

The equipment placed in service in Q1 of fiscal year would qualify. The final 9 months would not qualify unless Congress makes any change retroactively.
Reply to Topic 

Respond

Have something to say?   Please Login or Register.

Login

Register