Section 179 Change for 2010: Certain Real Property Improvements May be Immediately Expensed

The Section 179  Deduction for Items, which may be subject to depreciation has always allowed an immediate deduction of expenses for capital items.  Most accountants choose not to avail their clients of the election when they start their businesses due to the initial tax losses of a start up electing rather to use the depreciation over time so it may be applied to net sales as the business grows.

New for 2010 is the Section 179 deduction for not only equipment and vehicles but for capital improvements to real property.

The immediate expensing of all costs associated with real property improvements include:

Any improvements to owned property subject to depreciation.

Any leasehold improvements that are part of a lease, apply only to space occupied by the lessee, does not involve elevators, escalators, enlargement of the building, common areas.

Taxpayers can deduct up to $250,000 in any year subject to taxable income limitations.

Any unused Section 179 deduction expenses may be depreciated in following years.