Once again, CCH is the first I am aware of to release the inflation adjusted Federal tax information for the following year.

Of course, with all of the discussion about extending or not extending the Bush tax cuts for some or all taxpayers, these schedules may have to be completely revised before we prepare any actual 2010 tax returns.

In anticipation of one of the most common questions I receive, the annual exemption from Gift Tax will remain at $13,000 per donor per donee for 2011.  The amount can only be increased in even $1,000 increments and inflation hasn’t been high enough to warrant that as of yet.

CCH has a good free summary of the tax changes that are in store for almost everyone in 2011 if nothing is done to extend the Bush tax cuts.  With all of the debate over actually doing something to allow the lower tax rates to continue for a few more years, this summary may be obsolete in a few months; but it’s a good reference to have in the meantime. 

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.