Question

which of the following type of property is not elegible for the section 179 expensin election?

a. property depreciable under irc section 168

b. section 1245 property including off-the-shelf computer software

c. land impovements

d. property used in a trade or business

Answer 1

To qualify for Section 179 deduction, the asset must be:

• Tangible;
• Purchased, not leased, for use in your trade or business;
• Used more than 50% in your trade or business;
• Placed in service (purchased, acquired, or converted to business use) during the current tax year; and
• Acquired from a non-related party.

You cannot claim a Section 179 deduction for:

• Real property (e.g., land, building, sidewalks, landscaping, parking lots);
• Income-producing real property;
• Investment property;
• Assets used 50% or less by your business;

Correct answer is c. Land Improvements

• Assets acquired in a tax-free exchange or from a person or entity with whom you share a close relationship as specified by the IRS; or
• Intangible assets such as copyrights or patents.