Hi, Thanks for replying.
The profit for the business, one of my rental properties, after other expenses and before the truck Section 179 election of $34507 was about $45000- and about $10,000 after the Section 179 deduction.
As it ends up, as I went through my tax filing within Turbotax, the Section 179 deduction election apparently was not allowed against rental income even though that rental property is part of a qualified business enterprise. In my case it seems that the Section 179 deduction was only allowed against my Schedule C income, which for me is property management income.
I had to pay myself enough in property management fees, an additional $34507, to cover the $34507- Section 179 deduction for part of the truck cost from Schedule C income.
As far as I know, Section 179 elections for tools and equipment and vehicles, etc. can only be made against income generated by the relevant business. For example, Section 179 elections may not be made against unrelated income, such as capital gains for selling stocks.
Also, as far as I know, Section 179 deductions may only be made to the point of deducting profit down to zero and may not be used to generate losses. Part of a Section 179 deduction that would take the bottom line below zero, that would generate a loss, would be disallowed. What is not clear is if Section 179 deductions are the first made or the last made. In other words, if a Section 179 deduction is made first and the business still has profit then may other deductions for expenses be made that would leave a loss? Or, if other deductions for expenses are made first and the business still has a profit then may a Section 179 deduction be made that would only take the net profit down to zero. It seems to me that if a Section 179 deduction is being made then the business may not report a loss because Section 179 deductions may not be used to generate losses.
