IRS Code Section 179 Election – Recapture

If you dispose of the property, or stop using it in a trade or business, before the end of the cost recovery period that would have applied to the property had you not made the election for the property, all or part of the amount of the deduction you claimed under the election must be taken back into income (“recaptured”). Exactly how much will depend on the type of property and how long you used the property in a trade or business.

The information in the past few blog posts covers the essential elements of the Code Section 179 election. Clearly,
many considerations go into each decision to acquire business assets, and many involve non- tax factors. However, the election should play a role; accelerated tax benefits may enable you to obtain the property you need earlier and at reduced after-tax costs.