Tax Guru – Ker$tetter Letter

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Archive for August 17th, 2011

Taxing the ugly?

Posted by taxguru on August 17, 2011

Everything is up for grabs in terms of being taxed, as in this clip from Red Eye last night.

Posted in humor, SinTaxes, video | Comments Off on Taxing the ugly?

Sec. 179 assets have to be used in the USA

Posted by taxguru on August 17, 2011

Q:

Subject: Foreign assets and sect 179

I saw your informative web page concerning 179 property.

Where are foreign assets carved out from its application?

 

A:

From the IRC on TheTaxLibrary:

§ 179(d) Definitions and special rules

§ 179(d)(1) Section 179 property

For purposes of this section, the term “section 179 property” means property—
§ 179(d)(1)(A) which is—

§ 179(d)(1)(A)(i) tangible property (to which section 168 applies), or
§ 179(d)(1)(A)(ii) computer software (as defined in section 197 (e)(3)(B)) which is described in section 197 (e)(3)(A)(i), to which section 167 applies, and which is placed in service in a taxable year beginning after 2002 and before 2013,
§ 179(d)(1)(B) which is section 1245 property (as defined in section 1245 (a)(3)), and
§ 179(d)(1)(C) which is acquired by purchase for use in the active conduct of a trade or business.
Such term shall not include any property described in section 50 (b) and shall not include air conditioning or heating units.

§ 50(b) Certain property not eligible

No credit shall be determined under this subpart with respect to—

§ 50(b)(1) Property used outside United States

§ 50(b)(1)(A) In general

Except as provided in subparagraph (B), no credit shall be determined under this subpart with respect to any property which is used predominantly outside the United States.

From Page 9-15 of TheTaxBook:

Other nonqualifying property:

• Air conditioning or heating units.

• Property used predominantly outside the United States, except property described in IRC Section 168(g)(4).

 

From Page 17 of IRS Publication 946:

Excepted Property

Even if the requirements explained earlier under What Property Qualifies are met, you cannot elect the section 179 deduction for the following property.

· Certain property you lease to others (if you are a noncorporate lessor).

· Certain property used predominantly to furnish lodging or in connection with the furnishing of lodging.

· Air conditioning or heating units. 

· Property used predominantly outside the United States, except property described in section 168(g)(4) of the Internal Revenue Code.

I hope this helps.

Kerry Kerstetter

 

 

Follow-Up:

Thank you VERY much. I blew right by section 50. I had seen Pub 946. I don't believe I have ever laid eyes on section 50.

 

TaxCoach Software: Are you giving your clients what they really want?

 

Posted in 179 | Comments Off on Sec. 179 assets have to be used in the USA