This Week's LessonWeek of February 16
There are limits on: (1) The total cost of qualifying property you can choose to treat as a section 179 deduction, and (2) The total amount of the section 179 deduction plus the depreciation deduction (discussed later) you can claim for a qualifying property. Generally, you can choose to treat up to $25,000 of the cost of qualifying property as a section 179 deduction in 2003. The limit depends on the percentage of business use. You must use the property more than 50% for business to claim any section 179 deduction. If you used the property more than 50% for business, multiply the cost of the property by the percentage of business use. The result is the cost of the property that qualifies for the section 179 deduction.
In addition, the total amount of section 179 and depreciation deductions that you can claim for a car that you place in service in 2003 cannot be more than $3,060. The limit is reduced if your business use of the car is less than 100%.