. And I don't know the recovery period of a drone, but if we're past that, doesn't it leave us with no 179 recapture?If a taxpayer's section 179 property is not used predominantly in a trade or business of the taxpayer at any time before the end of the property's recovery period, the taxpayer must recapture in the taxable year in which the section 179 property is not used predominantly in a trade or business any benefit derived from expensing such property.
. Then the reg. refers to not just the listed property rules but also the investment credit rules, and in so doing explains that there is no tax benefit rule here, andPredominant use. Property will be treated as not used predominantly in a trade or business of the taxpayer if 50 percent or more of the use of such property during any taxable year within the recapture period is for a use other than in a trade or business of the taxpayer.
. That's a doozy. I'll have to think about what itemized deductions have to do with it, but one of you will tell me before I figure it out. And I digress, because what we need to figure out is whether a switch to using the property as an employee is or is not a switch to personal use. We all know there is such a thing as being in the trade or business of being an employee, but just for certain purposes. Again, one of you will find that rule and let us know how if at all that applies here.in the case of an individual who does not elect to itemize deductions under section 63(g) in the taxable year of recapture, the amount allowable as a deduction under section 168 in the taxable year of recapture shall be determined by treating property used in the production of income other than rents or royalties as being property used for personal purposes.
Nilodop wrote:Even if the change in use in 2022 is considered a change to non-business use, it's not necessarily the year for 179 recapture. Let's say it goes from 100% business use to 0%, but not until, say, November 30. Wouldn't it still be 91-2/3% (11/12) business use in 2022? I read this reg. as saying the recapture would be in the following year..If a taxpayer's section 179 property is not used predominantly in a trade or business of the taxpayer at any time before the end of the property's recovery period, the taxpayer must recapture in the taxable year in which the section 179 property is not used predominantly in a trade or business any benefit derived from expensing such property.
Nilodop wrote:And I don't know the recovery period of a drone, but if we're past that, doesn't it leave us with no 179 recapture?
Nilodop wrote:That excerpt is from reg. 1.179-1(e), which goes on to explain predominant use.. Then the reg. refers to not just the listed property rules but also the investment credit rules, and in so doing explains that there is no tax benefit rule here, andPredominant use. Property will be treated as not used predominantly in a trade or business of the taxpayer if 50 percent or more of the use of such property during any taxable year within the recapture period is for a use other than in a trade or business of the taxpayer.. That's a doozy. I'll have to think about what itemized deductions have to do with it, but one of you will tell me before I figure it out. And I digress, because what we need to figure out is whether a switch to using the property as an employee is or is not a switch to personal use. We all know there is such a thing as being in the trade or business of being an employee, but just for certain purposes. Again, one of you will find that rule and let us know how if at all that applies here.in the case of an individual who does not elect to itemize deductions under section 63(g) in the taxable year of recapture, the amount allowable as a deduction under section 168 in the taxable year of recapture shall be determined by treating property used in the production of income other than rents or royalties as being property used for personal purposes.
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