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Locked out of new Section 179 break

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in Small Business Tax,Small Business Tax Deduction Strategies

Q. We want to buy our business building. Can we write off most of the cost if we complete the deal by Dec. 31? A.G., Indianapolis

A. No. Under the new small business law provisions for Section 179, you can deduct up to $250,000 of the cost of qualified real property placed in service in 2010. However, this enhanced Section 179 deduction applies only to qualified leasehold improvements, qualified restaurant property, and qualified retail improvement property. Generally, you still must depreciate the cost of buying an existing building over a 39-year period.

Tip: The maximum $250,000 deduction also applies to qualified real property placed in service in 2011. The real estate write-off reduces the $500,000 deduction amount available for other qualified purchases.

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