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Sec. 179 depreciation limited to taxable Business Income

I thought I understood this completely, but now I'm wondering. All other limits withstanding, I was under the impression that if a business grossed $50K, then it could expense up to $50K of depreciable property in the year of that purchase. Now I'm wondering if I should be looking at the business net income before §179 depreciation is taken as the proper limit.

I know that according to Pub. 946, charitable contributions can come into play, but not an issue in my situation.

The reason is that I want to take more than the $25K of 179 that I can take for Maine in order to lower my fed. liability and then deal with the excess

179 later. Sorry if I'm unclear & thanks.
Reply to
Wilson
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Your S 179 allowance is limited to net earned income but that includes wages and even net income from another unrelated business.

Reply to
Arthur Kamlet

sometime in the recent past Arthur Kamlet posted this:

Thanks. So to the net income on Sch. C (before the S 179) adds to wages on

1040 ln. 7. How about 1040 ln. 14 (especially from 4797) and Rental income (non-passive) from ln. 17?

I'm using Taxcut which gives me a 'Data Verification warning' that my S 179 'appears to exceed your taxable income from all sources' and may or may not need to be corrected.

Reply to
Wilson

The statute says NET business income of the TAXPAYER, not the business.

Not for an individual: Contributions are always non-business expenses.

The gain on the sale of a business asset is business income. Real estate rental income is not.

Note that the computation of business income is without regard to Section

179. Therefore, if one has a home office (280A) where there's a carryforward (when section 179 were to be included at face value) that exceeds the 179 amount, there is no 179 deduction (because the 280A amount carried comes out as a current year expense, leaving a net business income of zero or less).
Reply to
D. Stussy

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