In 2023, my company acquired software and equipment assets worth $100,000. I am interested in using Section 179 for depreciation, but it appears that my state only partially conforms to Section 179, allowing a maximum allowance of $25,000.
I would like to clarify whether the depreciation allowed under Section 179 is in addition to the regular depreciation. Let's assume that the assets have a lifespan of 5 years, and without Section 179, the depreciation amount would be $20,000 annually. In light of this, does it mean that with Section 179, the depreciation on the $100,000 assets, within the state conformity, can be $45,000 ($20,000 + $25,000)?
In addition, if the answer to the former question is positive, what about next year's depreciation? Will my company be allowed to take section 179 deprecation state maximum $25,000 on the assets (that is, total depreciation of $45,000)?
