Used machines and Section 179
what qualifies and what to keep on file.
A used machine can qualify for the same first-year deduction as a new one. What matters is how you acquired it, from whom, and when it was placed in service in your shop.
Not tax advice. Talk to your tax adviser or CPA about your situation. Information is current for the 2026 U.S. federal tax year (checked October 29, 2026); state rules differ.
Bought, new to you, and not from a related person.
- Acquired by purchase. Section 179 property must be acquired by purchase for use in your business. Property received as a gift or an inheritance does not count, and neither does property whose basis carries over from the seller.
- Not from a related person. For Section 179, IRS Publication 946 lists your spouse, ancestors and lineal descendants, and businesses in which you or they own more than 50%, among related persons. Purchases between members of the same controlled group are also excluded.
- New to you, for bonus depreciation. Used property qualifies for the 100% allowance if you did not use it at any time before acquiring it and you bought it (26 U.S.C. 168(k)).
- More than 50% business use in the year it is placed in service, for Section 179.
Where you buy matters less than how.
A machine bought from a dealer, at an auction, through an online marketplace or from another shop can qualify. The differences are practical: who owns the machine until you pay, whether you can inspect it under power, how fast it can be removed and shipped, and what paperwork you receive. Our guide to where to find a used machine before December 31 explains each type of seller.
What to keep for a used machine.
- A dated bill of sale naming the seller, the machine, the serial number and the price.
- Proof that the seller is not a related person or business, if your adviser asks for it.
- Auction invoices with the buyer's premium shown separately.
- Freight, rigging and installation invoices, and the dated run-off record.
Ask your adviser which of these costs belong in the machine's basis. IRS Publication 551 defines cost as the amount you pay in cash, debt obligations, other property or services.
Check the machine as well as the deadline.
A rushed year-end purchase still needs a careful look. Use the listing evidence checklist, the purchase agreement checklist and, for a five-axis machine, the used five-axis checklist. Check fair asking prices in the price guide and the model's reference page.
Need a used machine running by December 31? See where to find a used machine before year-end: OEM certified pre-owned programs, dealers, consignment, auctions and marketplaces, and how each one affects your timeline. Or ask MBB to help you find it.
The Section 179 guide.
Where these facts come from.
- IRS Publication 946, How To Depreciate Property
- 26 U.S.C. 179 (election to expense certain depreciable business assets)
- 26 U.S.C. 168(k) (special allowance for certain property)
- IRS Publication 551, Basis of Assets
Published by Delta Arc, LLC · Editor: Michael Davis · Last reviewed October 29, 2026.
Not tax advice. Talk to your tax adviser or CPA about your situation. Information is current for the 2026 U.S. federal tax year (checked October 29, 2026); state rules differ.