Investors & landlords

For one thing generally 179, bonus special depreciation must be elected in the year you place the asset into service. You did a cost seg 2 YEARS AFTER PUTTING THE PROPERTY INTO SERVICEand now want to take them retroactively which is not allowed. 

however:

1. Section 179 Deduction:

   • The Section 179 deduction allows small businesses to immediately deduct the entire cost of qualifyin...¹².
   • It’s particularly useful for major purchases of property, equipment, or machinery.

2. Cost Segregation:

   • Cost segregation is a tax strategy where you reclassify certain components of a property (such as a building) into shorter depreciation periods.
   • This allows you to accelerate depreciation and potentially claim larger deductions in the earlier years.

3. Scenario:

   • You put the property into service in Year 1.
   • In Year 2, you perform a cost segregation study and identify components that would have qualified for the Section 179 deduction in Year 1.

4. Considerations:

   • If the components identified through cost segregation would have qualified for the Section 179 deduction in Year 1, you can amend your tax return for that year.
   • By doing so, you can claim the Section 179 deduction for those components in the correct year.

5. Important Points:

   • Ensure that the components meet the Section 179 eligibility criteria (e.g., tangible personal proper...¹.
   • Consult with a tax professional to navigate the specifics of your situation and ensure compliance.