CCH Axcess Tax

Section 179/Bonus

This entry is used to compute current year Section 179 expense, prior year Section 179 expense, prior year carryover, and prior year bonus. The type of entry present is determined by reviewing the entries for "Date Placed in Service" and "Method." Section 179 expense is not allowed on assets with pre-ACRS methods for federal purpose unless the life is 3. In which case, "CS" and "SL" are valid entries.

If the asset has a life of 15 years and should be included in the total 179 property placed in service during the year, but no 179 is being claimed on the property, enter "0" in this field.

Note: Current year Section 179 is only computed if an amount is entered for an asset placed in service in the current tax year and a MACRS method is also entered.

The Section 179 expense election allows for a write-off of a portion of the cost of the asset in the year of purchase. This amount is a direct reduction to the "Cost/Other Basis." The Section 179 deduction is limited to the maximum allowed per tax return. The amount is then subject to the following additional limitations:

Allowable Section 179 expense is reduced, dollar for dollar, by the cost of tangible personal property (exceeding $2,030,000) placed in service in the current tax year. A diagnostic is issued when this limitation occurs.
The Section 179 expense is reduced on a listed property asset by the non-business portion.
The allowable Section 179 expense is limited to the aggregate trade or business income from the taxpayer's active trades and/or businesses. The following steps will be taken in the process of computing the allowable Section 179:
1. Determine the aggregate trade or business income (including wages unless otherwise elected) without regard to Section 179 expense.
2. Prepare a Summary Form 4562 if there is more than one business activity in the return with depreciable assets.
3. Include passthrough Section 179 from Interview Form K-1 in the Section 179 expense carried to the Summary Form 4562.
4. Determine if the Section 179 expense computed exceeds trade or business income.
5. Reduce current year Section 179 expense by the disallowed amount.
6. Report the allowable carryover of Section 179 expense on the "Tax Return Carryovers to 2020 report.
The asset is identified on the depreciation and amortization detail report with a "#" printed at the beginning of the asset description if the report is printed on a portrait form.

Note: If the date placed in service is "999999," or the method is a non-MACRS method, the amount entered for Section 179 is not treated as current year Section 179.