Section 179 compared to Special Allowance

[DMICPA]

Both methods yield the same result. The Sec 179 works for Iowa but not the Special Allowance.
Any other benefits from one verses the other?

[Lion]

You mean like the benefits comparison in TTB 9-11? Also, see pages 9-7 through 9-11. And, check on the states.

[DMICPA]

Yes, I checked on the States and Iowa does accept the 179 but not the Special Allowance. The only drawback to Sec. 179 is the potential for recapture.

[DaveinTexas]

The special allowance, or Bonus Depreciation, is taken without regard to income. 179 expensing needs income, Bonus does not. So, if your client’s net income is $5,000 and they want to use Section 179, they can only offset the $5,000 (unless a Sole Prop with other wages/income), and the remainder carries forward.

Bonus says, I’ll take the entire deduction, regardless of income, and create a loss.

Now, whether there is basis to take the loss or the activity is passive, that’s another story.