Which asset type is excluded from Section 179 deductions?

Which asset type is excluded from Section 179 deductions?

• A. New machinery
• B. Used vehicles
• C. Office furniture
• D. Buildings

Answer: (D)

Section 179 deductions allow businesses to deduct the full purchase price of qualifying equipment and software purchased or financed during the tax year, up to certain limits. However, not all assets qualify for this deduction. Buildings are specifically excluded from Section 179 deductions. This is because the Section 179 deduction is intended for movable, tangible personal property that loses value over time due to wear and tear, which does not apply to real property like buildings. Instead, buildings are subject to depreciation over a longer period under different tax rules. This distinguishes them from other types of assets such as new machinery, used vehicles, and office furniture, which can generally be deducted under Section 179. Each of these other asset types qualifies based on their usage and lifespan, making them eligible for accelerated depreciation benefits this section provides.

Section 179 deductions allow businesses to deduct the full purchase price of qualifying equipment and software purchased or financed during the tax year, up to certain limits. However, not all assets qualify for this deduction.

Buildings are specifically excluded from Section 179 deductions. This is because the Section 179 deduction is intended for movable, tangible personal property that loses value over time due to wear and tear, which does not apply to real property like buildings. Instead, buildings are subject to depreciation over a longer period under different tax rules. This distinguishes them from other types of assets such as new machinery, used vehicles, and office furniture, which can generally be deducted under Section 179. Each of these other asset types qualifies based on their usage and lifespan, making them eligible for accelerated depreciation benefits this section provides.