IRS Revises Sec. 179 Expensing Amounts to Reflect HIRE Act Changes

By Alistair M. Nevius, J.D.

From the IRS

On June 1, the IRS issued revised inflation-adjusted numbers to reflect the extension of the increased Sec. 179 expensing amount for 2010 (Rev. Proc. 2010-24).

On March 18, 2010, the Hiring Incentives to Restore Employment Act of 2010, P.L. 111-147 (the HIRE Act), extended for 2010 the increased amounts that taxpayers can expense under Sec. 179. The HIRE Act extended the $250,000 limitation on the aggregate cost of Sec. 179 property that can be treated as an expense. It also provided that the $250,000 amount is reduced by the amount by which the cost of Sec. 179 property placed in service during 2010 exceeds $800,000.

Originally, the $250,000 and $800,000 amounts were $125,000 and $500,000, respectively (Sec. 179(b)). The Economic Stimulus Act of 2008, P.L. 110-185, increased the amounts to $250,000 and $800,000 for tax years beginning in 2008 and 2009. The HIRE Act extended those increased amounts for another year.

When the IRS issued its inflation-adjusted numbers for 2010 (Rev. Proc. 2009-50), the Sec. 179 amounts had been scheduled to revert with the expiration of the Economic Stimulus Act changes. Rev. Proc. 2010-24 amends Rev. Proc. 2009-50 to take into account the HIRE Act’s extension of the larger amounts. The change is effective for tax years beginning in 2010.

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