Internal Revenue Code Section 179 Expense For Farmers For 2010

The section 179 expense deduction allows persons to elect to deduct the cost of certain property used in a trade or business instead of claiming depreciation. For federal tax purposes, for tax years beginning in 2010, the maximum section 179 expense deduction is generally $500,000. This limit is reduced by the amount by which the cost of section 179 property placed in service during the tax year exceeds $2,000,000.

For Wisconsin tax purposes, the amount that may be expensed under section 179 is limited to $25,000, and the phase-out threshold is $200,000.

An exception to the $25,000 limitation was provided for property placed in service during 2008 and 2009 for persons who were actively engaged in farming. However, this exception no longer applies.

For Wisconsin tax purposes, for taxable years beginning in 2010, persons who are actively engaged in farming are limited to the section 179 expense deduction of $25,000. The phase-out threshold is $200,000.

Individuals who claim the section 179 expense deduction must file Wisconsin Schedule I to account for the difference in the amount allowable for federal and Wisconsin tax purposes.

Corporations who claim the section 179 expense deduction in excess of the amount allowable for Wisconsin must make an adjustment on Wisconsin Schedule V to account for the difference in the amount allowable for federal and Wisconsin tax purposes.

S Corporations who claim the section 179 expense deduction in excess of the amount allowable for Wisconsin must make an adjustment on Wisconsin Schedule 5K, column c for the difference in the amount of allowable section 179 expense for federal and Wisconsin tax purposes.

Partnerships who claim the section 179 expense deduction in excess of the amount allowable for Wisconsin must make an adjustment on Wisconsin Schedule 3K, column c for the difference in the amount of allowable section 179 expense for federal and Wisconsin tax purposes.

Last updated October 12, 2010