Tax Guru – Ker$tetter Letter

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Archive for September 16th, 2010

Sec. 179 On Business Purchase

Posted by taxguru on September 16, 2010

 

Q:

Keri

Would the assets purchased in a business sale qualify for sec 179 dpn in 2010?

 

A:

If the amount of the purchase price allocated to the equipment is clearly stated and agreed on by both sides of the transaction, those assets should be set up on the purchaser’s deprecation schedule and depreciated in the same manner as if they had been purchased on their own.

In regard to qualifying for Section 179, the same restrictions as always would apply, including the business’s net income, the amount of total qualifying equipment acquired during the year and the relationship to the seller.  If the seller was a related party to the buyer, you would need to be careful in properly handling the values assigned to the equipment.

Good luck. I hope this helps.

Kerry Kerstetter

 

Follow-Up:

Thanks for confirming my thoughts.

 

 

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