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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16544
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Good Morning, We are an S corporation with 3 partners (52-24-24%).

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Good Morning,

We are an S corporation with 3 partners (52-24-24%). For 2013 we will most likely be showing 20,000.00-50,000.00 NOL as a corporation. As individuals we will show salaries between 50,000.00 and 120.000.00. We are in the position that investing in new vehicles has to be discussed. How can we use Section 179 at this point to our advantage? We have been a profitable company and fully expect to show a profit in the coming years.

Megan C :

Hello and welcome. My name is XXXXX XXXXX I will be happy to help you

Megan C :

If you are operating with a loss, no Section 179 would be allowed in the current year

Megan C :

You can only deduct Section 179 to the extent that you have income

Megan C :

However, any unused Section 179 deduction can be carried FORWARD indefinitely to help you take advantage in later years when you have income.

Megan C :

So, you can either put off the purchase until you have a profitable year, or you can make the purchase now and carry forward the deduction

Megan C :

Either way, you will offset your profit in future years, when there is a profit to offset

Customer:

Would any of the 179 deductions carry over to our individual taxes?

Megan C :

Yes, as it is a pass through entity.

Megan C :

Let me double check, but my understanding is that you can only deduction Section 179 when the business has a profit to offset.

Megan C :

Yes, the section 179 is based on the company's net income. When there is profit, you can offset

Customer:

Thanks, XXXXX XXXXX see this program extending into 2014?

Megan C :

While I cannot say with certainty that it will continue, I would not think that they would discontinue this. I think there will be an extension. Although, if you want to be safe you can buy this year.

Customer:

Thanks

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