To qualify for the IRS Code Section 179 election, the property must be tangible personal property. This means that real estate (buildings and their structural components) does not qualify, nor do intangibles such as patent rights. However, the following types of property also qualify:
- For a tax year beginning in 2011, up to $250,000 of real property consisting of certain leasehold improvements, retail improvements or restaurant property, and
- For tax years beginning before 2013, off-the-shelf computer software.
Also, to qualify, property must be purchased. Thus, if, for example, you acquired the property in a tax-free exchange, by gift or inheritance, or from an individual or entity to which you bear a close relationship specified in the Code, the property does not qualify.
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