Which statement is true about changes to Section 179 deductions over time?

Which statement is true about changes to Section 179 deductions over time?

• A. It has remained unchanged since its inception.
• B. Section 179 applies only to new equipment.
• C. The deduction amounts and phase-out thresholds have changed over the years.
• D. It is not allowed for used equipment.

Answer: (C)

Section 179 deductions move over time because they’re set by law and adjusted for inflation in different years. The maximum amount you can expense in the year, and the point at which that limit begins to phase out, aren’t fixed—they’ve been changed by various tax acts and annual indexing. That’s why the deduction limits and phase-out thresholds aren’t the same year to year. It’s also worth noting that Section 179 can apply to used equipment as well as new, as long as the property is eligible and used in a qualifying business activity. So the true statement is that the deduction amounts and phase-out thresholds have changed over the years.

Section 179 deductions move over time because they’re set by law and adjusted for inflation in different years. The maximum amount you can expense in the year, and the point at which that limit begins to phase out, aren’t fixed—they’ve been changed by various tax acts and annual indexing. That’s why the deduction limits and phase-out thresholds aren’t the same year to year. It’s also worth noting that Section 179 can apply to used equipment as well as new, as long as the property is eligible and used in a qualifying business activity. So the true statement is that the deduction amounts and phase-out thresholds have changed over the years.