Stuart A. Bronstein wrote:

[Ck breathes 5 or 6 sighs of relief....]

Thanks so much to ALL of you for your replies - and the
referenced quotes as well. I know it took some time to find
that specific regulation, section and paragraph.

I had about decided to take the 179 and just hope it was
allowed. It's a pretty significant deduction and I need
all the help I can get this year.

I have a related question I'll throw in here, but will
probably need to post a new topic to get a response.

Is timely filing required to be eligible for the Special
Depreciation Allowance? I understand that it is supposed
to be taken in the first year that the item is put in
service. But what if your return is late?

This is similar to the 179 deduction; it's difficult to
find all-inclusive concrete rules in one publication. I've
read so much about both subjects that they have blended into
a large gray mass.

Thanks again,

Cathy

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- quote -

I have a client who regularly files a year or more late,
usually when Franchise Tax Board threatens to garnish his
wife's wages. He had taken to filing their return with
mortgage interest and property tax and charitable
contributions only, omitting his Sch. C . We tried to claim
179 on some items he put into service on the amended return
to claim Sch. C income and deductions. It was denied and he
was forced to depreciate the items . On those returns where
he filed late (beyond the extension due date) with a 179
deduction, it was allowed.

Linda Dorfmont E.A., CFP, CSA

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Ckbeme wrote:
- quote -

Well, I was just trying to be polite in my response.
But more to the point, see Stuart's reply above.

- quote -

Can't remember when, but probably several years ago. And I'd
do it again.

- quote -

Just do it.

ChEAr$$$$,
Harlan Lunsford, EA n LA

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Harlan Lunsford wrote:
- quote -

Hey Harlan,
That's an interesting response. I wish Mike would respond to
my reply to his msg. I asked him to point out the Pub # and
tell me where the statement is that says it's disallowed on
a late return.

Was that fairly recently that you used a 179 deduction? And
did you also take the Special Depreciation Allowance? (or
was it around then)

Clock's a ticking' and I'm leaning towards taking the 179
and if they refuse it, maybe they can show me where to find
that rule.

Thanks for your input. Please share any other related info.

Cathy

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Harlan Lunsford <hnslunsf...[at]bellsouth.net> wrote:
- quote -

You are correct. It did get changed. Thanks.

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"Mike Wellman" <irsfi...[at]aol.com> wrote:
- quote -

The regulations make it clear that a valid section 179
election *can* be made on a late-filed return. Here's what
the regs say:

"The election under section 179 and 1.179-1 to claim a
section 179 expense deduction for section 179 property shall
be made on the taxpayer's first income tax return for the
taxable year to which the election applies (whether or not
the return is timely) or on an amended return filed within
the time prescribed by law (including extensions) for filing
the return for such taxable year."

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Ckbeme <ck.news[at]tx.rr.com> wrote:
- quote -

Actually it looks like Mike's not correct. Treasury
Regulation 1.179-5 says,

"The election under section 179 and 26 C.F.R. § 1.179-1 to
claim a section 179 expense deduction for section 179
property shall be made on the taxpayer's first income tax
return for the taxable year to which the election applies
(whether or not the return is timely) or on an amended
return filed within the time prescribed by law (including
extensions) for filing the return for such taxable year."

Note the operative terms: the election "shall be made on the
taxpayer's first income tax return for the taxable year ...
(whether or not the return is timely)...."

There is no restriction in section 179 that requires the
election to be taken on a return that is filed timely.

Stu

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Mike Wellman wrote:
- quote -

That used to be the case, but I think it changed somewhere
along the line. or maybe IRS didn't notice when I filed a
late return once for a client with section 179 property.

ChEAr$$$$,
Harlan Lunsford, EA n LA

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Mike Wellman wrote:
- quote -

Oh, boy. That is not the answer I wanted to hear, but thanks
for your response.

Not to argue with someone who is more knowledgeable, but can
you tell me what pub (and the section/area of the pub) gives
a statement to that effect? When I reviewed instructions
today the only thing I found pertained to the Special
Depreciation Allowance. It stated that the special
depreciation allowance had to be taken on a timely filed
return.

So I bet you're going to tell me that neither can be
deductions on a late return...

What a large gift I've given to the IRS, 2 years running.

Ck

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Ckbeme <ck.n...[at]tx.rr.com> wrote:

- quote -

The Section 179 election is not valid for a late filed
return.

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I'm filing 2003 taxes and have a refund coming (long story,
I have had several major surgeries and rehab from 2002 to
2006, but an incompetent CPA has left me in this spot).

2001 taxes were filed w/ $6050 refund applied toward future
taxes. 2002 taxes are not done yet, but I was eligible for
a refund of approx $ 7-9K - had I not missed the 3 year
deadline.

I have a small computer consulting business and had W2
income as well from 1998 to 2003.

I'm confused about the section 179 deduction and the
special depreciation allowance. I bought a qualifying
truck 12-31-2002 (over 6,000 lbs). I am going to take
the sec 179 deduction in 2003, the year the truck was put
into service. I've read several articles and IRS pub 463,
946, and 3991 - a May 2002 supplement.

I read SOMEWHERE (or dreamed it) that you had to put the
vehicle in service, and take the 179 deduction, and
purchase the vehicle all in the same tax year. I haven't
been able to find that statement again, so I'm hoping some
of you will be able to clarify that for me.

Unfortunately, since I've fired my CPA that lost my 2002
refund, I'm struggling to complete the small business
portion of my tax return. I don't have a copy of any tax
software for 2003, so I'm using TurboTax 2004 to give me
a little help on filling out these schedules.

Thanks for any help.

Cathy

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