What is Section 179 expensing?
In short
Section 179 lets a business elect to deduct the cost of qualifying property, mainly tangible personal property, in the year it is placed in service instead of depreciating it. The One Big Beautiful Bill Act raised the limit to $2.5 million for 2025 ($2,560,000 for 2026).
Key takeaways
- The limit is reduced dollar for dollar when qualifying purchases exceed an indexed threshold ($4 million for 2025).
- The deduction can't exceed taxable income from the business, so it can't create a loss; the excess carries forward.
- It is applied before bonus depreciation.
Where it's tested
REG: Property Transactions: Basis & Cost Recovery — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Under the One Big Beautiful Bill Act, which statement about bonus depreciation is correct for qualifying property acquired after January 19, 2025?