Discussion:Sec 179 depr for sole prop
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Revision as of 13:14, 11 April 2008 DerekCPA (Talk | contribs) (Fred I'm with yo) Next diff → |
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| I am not talking Sub S Corp, I am talking Sch C. S-Corps and 1065's are different returns and different regs apply. Specifically Sch C.}} | I am not talking Sub S Corp, I am talking Sch C. S-Corps and 1065's are different returns and different regs apply. Specifically Sch C.}} | ||
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| + | {{ForumReplyPost|UserID=DerekCPA|Date=11 April 2008|Text=Fred I'm with you. I think that the all business and trade related income(including W2's) figures into the calculation.}} | ||
Revision as of 13:14, 11 April 2008
Discussion Forum Index --> Basic Tax Questions --> Sec 179 depr for sole prop
Discussion Forum Index --> Tax Questions --> Sec 179 depr for sole prop
| 10 April 2008 | |
| Have a sole prop client who went into business by purchasing a vending route for $100k. The price includes ownership of about 45 vending machines. Can he claim Sec. 179 for the FMV of the machine (about $1,000 each), even if the business does not have a $45k profit? Keep in mind his wife has W-2 income that, when added to the mix, generates an overall positive amount of income......here's the scenario....
Revenues = $100k Expenses (excluding Sec. 179 depr) = 75k Sec 179 = $45k Wife's W-2 = $60k Can the Sec. 179 be claimed since the overall cash inflow on Form 1040 ($100k + $60k) is greater than the outflow ($75k + $45k Sec. 179). Thanks. | |
| 10 April 2008 | |
| Sorry, Let me present this with better formatting......
Have a sole prop client who went into business by purchasing a vending route for $100k. The price includes ownership of about 45 vending machines. Can he claim Sec. 179 for the FMV of the machine (about $1,000 each), even if the business does not have a $45k profit? Keep in mind his wife has W-2 income that, when added to the mix, generates an overall positive amount of income......here's the scenario.... Revenues = $100k; Expenses (excluding Sec. 179 depr) = 75k; Sec 179 = $45k; Wife's W-2 = $60k; Can the Sec. 179 be claimed since the overall cash inflow on Form 1040 ($100k + $60k) is greater than the outflow ($75k + $45k Sec. 179). Thanks. | |
| 11 April 2008 | |
| No you cannot use the W-2 wages of wife, since the business is owned by the husband, only the income from the business is taken into account for the amount of sec 179 allowed. | |
| 11 April 2008 | |
| You can only deduct sec 179 up to the amount of net income on the sch C. Your example:
Revenue 100K Expenses 75K Income before sec 179 25K Sec 179 45K Net income after 179 0 Carry forward of sec 179 20K | |
| 2008-04-11 | |
| Discussion:Section 179 limitations | |
| 11 April 2008 | |
| Thanks all. Seems like a tie here. But thanks for the link to the prior thread Sw. The only question now remains is...can the wife's W-2 count towards the Sec. 179 calculation? | |
| 11 April 2008 | |
| No, the wife's w-2 cannot count towards sec 179, she is not an owner. | |
| 11 April 2008 | |
| Can you show me the regs that specifically state that the non sch c w-2 cannot be used against 179?
I've been offsetting W-2 income for years with Sec 179. If I am doing it incorrectly, please show me the way. | |
| 11 April 2008 | |
| You can offset the income, just no use it as a basis for sec 179. For example, A S Corp with 50,000 in net income, 50,000 w-2 for shareholder, then 100,000 sec 179 can be used. In the case above, Sch C does not have w-2 for owners, and wife is not an owner, if it is joint ownership, they need to file 2 sch Cs or file a partnership return, etc... | |
| 11 April 2008 | |
| Nate,
That is not what I asked. You stated that if a Sch C has Section 179 expense and that expense reduces the Sch C income to below 0, that that excess Section 179 expense cannot be used to offset the non owner spouse's W-2 and thereby reduce total overall taxable income. I do not believe that to be correct, but, I may be mistaken. I would like you to show me specifically where it states that this cannot be done? I am not talking Sub S Corp, I am talking Sch C. S-Corps and 1065's are different returns and different regs apply. Specifically Sch C. | |
| 11 April 2008 | |
| Fred I'm with you. I think that the all business and trade related income(including W2's) figures into the calculation. | |
