Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

  • Enter your email address to subscribe to this blog and receive notifications of new posts by email.

    Join 677 other followers

  • Blog Stats

    • 306,298 hits
  • Posts By Day

    February 2006
    M T W T F S S
     12345
    6789101112
    13141516171819
    20212223242526
    2728  
  • Subscribe

  • Special Pages

Adjusting For Sec. 179

Posted by taxguru on February 25, 2006

Q:

Subject: Section 179 Deduction

I’m hoping you can answer my question.  I work in a bank and I’m wondering about the effect of the 179 deduction on the company cash flow.  Is this considered a depreciation expense that can be added back to get traditional cash flow?  (net income + depreciation + interest expense)

A:

Section 179 is essentially a form of accelerated depreciation and is usually included on the same expense line with regular depreciation expense, except for pass-through entities, where it is shown separately on the K-1s because of the individual-level limits . 

Any adjustments you make to book income to add back in depreciation expense should be sure to add back the Section 179 if it is not already included in the stated depreciation total.

Kerry Kerstetter

 

Sorry, the comment form is closed at this time.

 
%d bloggers like this: