Section 179 Expense Election

§ 179. Election to expense certain depreciable business assets(a) Treatment as expensesA taxpayer may elect to treat the cost of any section 179 property as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction for the taxable year in which the section 179 property is placed in service. (b) Limitations(1) Dollar limitationThe aggregate cost which may be taken into account under subsection (a) for any taxable year shall not exceed $2,500,000. (2) Reduction in limitationThe limitation under paragraph (1) for any taxable year shall be reduced (but not below zero) by the amount by which the cost of section 179 property placed in service during such taxable year exceeds $4,000,000. (3) Limitation based on income from trade or business(A) In generalThe amount allowed as a deduction under subsection (a) for any taxable year (determined after the application of paragraphs (1) and (2)) shall not exceed the aggregate amount of taxable income of the taxpayer for such taxable year which is derived from the active conduct by the taxpayer of any trade or business during such taxable year. (B) Carryover of disallowed deductionThe amount allowable as a deduction under subsection (a) for any taxable year shall be increased by the lesser of—(i) the aggregate amount disallowed under subparagraph (A) for all prior taxable years (to the extent not previously allowed as a deduction by reason of this subparagraph), or (ii) the excess (if any) of—(I) the limitation of paragraphs (1) and (2) (or if lesser, the aggregate amount of taxable income referred to in subparagraph (A)), over (II) the amount allowable as a deduction under subsection (a) for such taxable year without regard to this subparagraph. (C) Computation of taxable incomeFor purposes of this paragraph, taxable income derived from the conduct of a trade or business shall be computed without regard to the deduction allowable under this section. (4) Married individuals filing separatelyIn the case of a husband and wife filing separate returns for the taxable year—(A) such individuals shall be treated as 1 taxpayer for purposes of paragraphs (1) and (2), and (B) unless such individuals elect otherwise, 50 percent of the cost which may be taken into account under subsection (a) for such taxable year (before application of paragraph (3)) shall be allocated to each such individual. (5) Limitation on cost taken into account for certain passenger vehicles(A) In generalThe cost of any sport utility vehicle for any taxable year which may be taken into account under this section shall not exceed $25,000. (B) Sport utility vehicleFor purposes of subparagraph (A)—(i) In generalThe term “sport utility vehicle” means any 4-wheeled vehicle—(I) which is primarily designed or which can be used to carry passengers over public streets, roads, or highways (except any vehicle operated exclusively on a rail or rails),