One of the many qualifiers of a Section 179 deduction is it may not exceede the amount of income earned the same year and the deduction % against the expenditure is based on the the tax payers current tax bracket. My flowthrough LLC annual earnings consist of $900,000.00 (Patent Royalties) taxed at the Capital Gains Rate and $140,000.00 as an ordinary earned income Salary. The LLC is considering a Section 179 qualified vehicle (7000lb +) purchase for exclusive business use in the same year for $150,000.00. Question: What tax bracket is relied upon in determining the deduction benefit? Capital Gains Bracket? or Ordinary income? or a combination thereof?
