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Section 179 Depreciation Rules for 2013

Posted on January 24th, 2013 4:40 pm

Section 179 has received a boost for the 2013 tax year. For complete details go to http://www.govtrack.us/congress/bills/112/hr8/text.  In short, Section 179 is relatively straight-forward. If you purchase, finance or lease qualifying equipment and/or software, you may be eligible take a full tax deduction on it this year.

Here are the new Section 179 Deduction Limits for 2013 (and 2012 retroactive).  Section 179 has been enhanced for both 2012 and 2013 tax years (2012 is retroactive, obviously). This is due to the passage of H.R.8: American Taxpayer Relief Act of 2012.

Section 179 Depreciation qualifying limits:

*  2013 Deduction Limit = $500,000

*  2013 Limit on Capital Purchases = $2,000,000

* 2013 Bonus Depreciation = 50%

Note the above limits are as of 1/1/2013, and are for tax year 2013. Additionally, the 2012 limit of $125,000 deduction has now been raised to $500,000. Therefore, qualifying equipment purchases made in 2012 can take advantage of the new, higher deduction limits.

Please note:

*  Section 179 Deduction is available for most new and used capital equipment, and also includes certain software.

* Bonus Depreciation can be taken on new equipment only (no used equipment, no software

* When applying these provisions, Section 179 is generally taken first, followed by Bonus Depreciation – unless the business has no taxable profit in the given tax year.

Many businesses are finding Section 179 Qualified Financing to be an attractive option in 2013.

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David Coit

David Coit is a Senior Account Manager at Amerifund, Inc., an independent equipment finance company located in Scottsdale, AZ. He has over 25 years' commercial finance experience, and has lived in the Valley for the past 16 years. His career began in Chicago at American National Bank, and continued with commercial finance positions at several leading financial institutions including M&I Leasing. Prior to joining Amerifund, David served 11 years as Vice President Capital Markets and Loan Syndications at Wells Fargo Equipment Finance and its predecessor company CIT Equipment Finance. He has a B.S. degree in Economics from Northern Illinois University, an M.B.A. from Keller Graduate School of Management, and is a doctoral candidate at Walden University seeking a D.B.A. with a specialization in finance. David is a Visiting Professor at Keller Graduate School of Management, where he teaches M.B.A. candidates corporate finance.

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