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The total amount you can elect to deduct under section 179 is subject to a dollar limit and a business income limit.
The total cost you can deduct each year after you apply the dollar limit is limited to the taxable income from the active conduct of any trade or business during the year. Generally, you are considered to actively conduct a trade or business if you meaningfully participate in the management or operations of the trade or business.
Any cost not deductible in one year under section 179 because of this limit can be carried to the next year.
You may see more details in IRS publication 946 - http://www.irs.gov/pub/irs-pdf/p946.pdf
For section 179 qualifications - you need to use "related business income"
Distribution from C-corporation is not considered your business income - and may not be used in the section 179 limit calculations.
Sorry if you expected a different answer.
You may confirm the information provided by calling the IRS directly 1-800-829-1040
or Assistance for Businesses: 1-800-829-4933Hours of Operation: Monday – Friday, 7:00 a.m. – 10:00 p.m. your local time
Let me know if you need any help.
I owned the stock of the corp, and operated and managed the corp. and earned all the income of the corp. from my professional services. With this additional information do you think that the dividend or capital gain from the corp. does not qualify because it is not a related business?
Dividends are not compensation for your professional services and may not be use for section 179 calculations.
C-corporation paid its own taxes and was able to claim a section 179 deduction.
You - as an employee of C-corporation earned wages for your professional services.
If you received wages from C-corporation and used a property as an employee of C-corporation for your job - you may deduct depreciation of that property.
As an employee - - your employee business expenses are deducted on the form 2106 and schedule A - subject of 2% floor limitation.
Let me know if you need any help with reporting.