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Which is better--section 179 or bonus depreciation?
This question is part of the Focus Finance Roundtable: Effective Tax Strategies for Small and Medium-Sized Businesses on January 6th, 2011.
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1 Answer
This depends upon your situation. For select fixed assets placed in service from September 9, 2010 through the end of 2011, 100% of the purchase price of the asset may be depreciated in the year of purchase. For the entrepreneurs with smaller businesses this is important because you can take bonus depreciation even in a loss situation whereas Section 179 cannot put you into a loss. Also, bonus depreciation is only available for new assets placed into service whereas you could use Section 179 on certain assets that are new to you even if they have been previously used.
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