Definition
A tax deduction allowing businesses to immediately deduct the cost of certain property purchases instead of depreciating them over time.
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Section 179 allows taxpayers to deduct up to $1,160,000 (2023) of qualified property in the year purchased instead of depreciating over multiple years. This applies to equipment, appliances, and other business property. The deduction phases out if total purchases exceed $4,600,000. Owner-occupied residential property doesn't qualify, but rental property improvements may. Investors should consult tax professionals about qualifying improvements.
Pro Tip
Consult a tax professional to identify qualifying property improvements for Section 179 treatment.
Example
A rental investor purchased $80,000 in appliances and fixtures that could be Section 179 deducted in the purchase year.