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Section 179 deductions can be elected in the same year that the equipment is purchased. One of the best features of this deduction is that you do not have to make the full payment before December 31st 2010, so you can opt for an equipment lease or business loan. Also, the amount of this deduction is not based on the number of days this equipment has been in service. So it’s never too late! You are entitled to the $500,000 deduction as long as you buy the equipment by December 31st. When Must You Recapture the Deduction?You may have to recapture the section 179 deduction if, in any year during the property’s recovery period, the percentage of business use drops to 50% or less. You also increase the basis of the property by the recapture amount. If you sell, exchange or dispose of the property, the IRS requires that the rules for recapturing depreciation are applied, which can be found here .
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