AnnetteB6
Employee Tax Expert

Business & farm

In general, you would expect a larger deduction to lower your tax liability.  However, there are certain circumstances where that might not be the case.  

 

For example, if your rental property has an overall gain and you are claiming the Qualified Business Income (QBI) deduction, then using section 179 to claim the total cost of the stovetop is reducing your overall gain and your QBI deduction.  Therefore, your balance due is higher because the QBI deduction is lower.

 

Depreciating the stovetop does not reduce your overall gain as much and therefore the QBI deduction would be higher than in the section 179 calculation, thus resulting in a lower balance due. 

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