Section 179 FAQ
for machine and equipment buyers.

$2,560,000 for tax years beginning in 2026, reduced dollar for dollar once the Section 179 property you place in service in 2026 costs more than $4,090,000 (IRS Rev. Proc. 2025-32).

Yes, if it qualifies and is placed in service, meaning ready and available for its specific use, by the end of your tax year. Paying for it or having it delivered is not enough on its own.

Yes. A used machine can qualify if you bought it for business use, it was not from a related person, and, for bonus depreciation, you had not used it before.

Generally yes. The financed part of the price is part of the machine's cost, so the deduction can be based on the full cost even though you pay it over time.

Usually not for the lessee under a true lease, because the lessor owns it; lease payments are generally a business expense instead. Some leases with a nominal buyout may be treated as purchases. Ask your adviser.

No. Goods held for resale are inventory, not equipment used in the business, and cannot be depreciated or expensed under Section 179. Their cost is generally recovered when they are sold.

Section 179 is an election with a dollar limit and a business-income limit. 100% bonus depreciation applies automatically to qualifying property acquired after January 19, 2025, with no dollar cap and no business-income limit. Section 179 is applied first.

Yes, for qualifying property acquired after January 19, 2025. Property acquired under a written binding contract signed before January 20, 2025 follows the older, lower rate.

Section 179 is limited to taxable business income, and the excess carries forward. Bonus depreciation is not limited by business income.

Not always. Many states limit or do not adopt Section 179 or bonus depreciation. Your adviser can tell you how your state treats each.

On Form 4562, Part I, filed with your return for the year the property is placed in service.

If business use falls to 50% or less, part of the Section 179 benefit can be recaptured as income.