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Government Affairs Update
The 2008 Economic Stimulus Package increased the limits on
expensing. Under the new law businesses that spend less than $800,000
a year on qualified equipment, can write off up to $250,000 in 2008.
The rules are designed for small companies, so the $250,000 deduction
phases out when a business purchases more than $800,000 in one year
(Companies cannot write off more than their taxable income).
The tax code that covers expensing is Section 179. The code states:
that a business can choose to recover all or part of the cost of certain
qualifying property by deducting it in the year it is placed in service.
Businesses can elect the section 179 deduction instead of recovering the
cost by taking depreciation deductions."
Two independent tax accountants verified that purchasers of used
machinery may take advantage of this expensing provision.
In order to take advantage of the 2008 tax incentives, business
equipment must be put in use by year-end. Unless Congress extends
this, the Tax Code 179 deduction will go back to $125,000 with the
limit of $500,000 in 2009.
Please let me know if you have any questions and I will do my best to
get you an answer; however, as always, every company should contact
their tax advisor to learn about the specific impact to their business.
Buy - Sell - Trade-In Programs
150 Martin Street, Longmont CO 80501 |
