IRC 179 Question (as modified by the TCJA)

[Christopher Smith]

I've been exploring the discussions addressing IRC 199A and the IRC 162 requirement that must be met in order to obtain the new tax benefit under 199A. During that process, I came across the item below which appears to assert that if IRC 162 is met then the following also may apply:

What Property Can Be Deducted Under Section 179

A business can use Section 179 to deduct tangible, long-term personal property. In the past, Section 179 could not be used to deduct personal property used in residential rental property. However, the Tax Cuts and Jobs Act eliminated this restriction starting in 2018. This means that landlords can now use Section 179 to deduct the cost of personal property items they purchase for use inside rental units—for example, kitchen appliances, carpets, drapes, or blinds. For example, if you spend $3,000 for a new stove and refrigerator for a rental unit, you may deduct the entire amount that year with Section 179.

Assuming I can meet the IRC 162 threshold, is this as straight forward as it appears for owner's of residential real estate rentals?

[Ashish Acharya]

Originally posted by @Christopher Smith:

I've been exploring the discussions addressing IRC 199A and the IRC 162 requirement that must be met in order to obtain the new tax benefit under 199A. During that process, I came across the item below which appears to assert that if IRC 162 is met then the following also may apply:

What Property Can Be Deducted Under Section 179

A business can use Section 179 to deduct tangible, long-term personal property. In the past, Section 179 could not be used to deduct personal property used in residential rental property. However, the Tax Cuts and Jobs Act eliminated this restriction starting in 2018. This means that landlords can now use Section 179 to deduct the cost of personal property items they purchase for use inside rental units—for example, kitchen appliances, carpets, drapes, or blinds. For example, if you spend $3,000 for a new stove and refrigerator for a rental unit, you may deduct the entire amount that year with Section 179.

Assuming I can meet the IRC 162 threshold, is this as straight forward as it appears for owner's of residential real estate rentals?

Yeah, 

This one is little funky. You first need to meet an active trade or business for sec 179. So that is another whole discussions .

But in general, as rental generates loss or very minimum tax net income, sec 179 is limited to the net income from business. Thus most investor don’t qualify to take this.

You can achieve same deduction with 100% bonus depreciation that has no income limitations. 

Sometimes it’s better to take sec 179 if both bonus and 179 are available to get higher depreciation no.