Answer the following statements true (T) or false (F)

Question

1. Section 179 allows taxpayers to immediately expense up to $1,000,000 for 2018 of the cost of real and personal property placed into service in a trade or business, subject to limitations.
2. The Section 179 expensing election is available on an annual basis for property purchased during the year.
3. Sec. 179 tax benefits are recaptured if at any time an asset is converted to personal use.
4. Any Section 179 deduction that is not allowed currently due to the taxable income limitation may be carried over and deducted in future years.
5. With respect to options to accelerate depreciation deductions for new qualifying assets, a taxpayer must elect into Sec. 179 expensing, but elect out of bonus depreciation.

Answer 1

1. FALSE
Section 179 does generally apply to real estate.
2. TRUE
Qualifying taxpayers can utilize Sec. 179 expensing each year that depreciable property is purchased.
3. TRUE
If Sec. 179 property is converted to personal use, the recaptured amount is included in income.
4. TRUE
A Sec. 179 deduction can be carried over if it is not fully utilized due to the taxable income limitation.
5. TRUE
For qualifying property, bonus depreciation is the default method, and a taxpayer must elect out of it. Sec. 179 is an option that a taxpayer must elect into.