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Hi, my name is Mark. I will be happy to help you with your questions. Please give me a moment to prepare your response.
The section 179 expense deduction is for small business. As you mentioned in your post there is a $2 million limitation. This means that once the cost of equipment goes above this amount the amount of available Section 179 expenses is reduced dollar for dollar. So if over $2.5 million is spent on equipment, the amount of potential Section 179 expense is eliminated. Did the LLC purchase new equipment?
What intangible expenses are you referring to? Are these intangible assets?
The LLC would be eligible to claim bonus depreciation of 50% of the cost of the new equipment. So although the LLC does not receive the benefit of Section 179 expense it does benefit from accelerated depreciation due to the bonus depreciation.
For the consulting fees and engineering fees are these associated with drilling costs?