Credit Card Purchase & Sec 179 Ded

[Taxman]

If a business owner purchases a new piece of equipment with a credit card ($4,000) and assuming the business has sufficent taxable income, is the business allowed a section 179 deduction for that purchase?

[BOB W]

Yes...

credit card purchases through a national credit card, as opposed to a store credit card, is considered a purchase/finance purchase. As long as the purchase is placed in service you have an item for 179.

[Bird Legs]

Sect. 179

It is allowed in the year equip. is placed in service. See TTB page 9-15.

[BOB W]

Unique 179 issue

Sometimes if a client does not have a profit or not enough profit, I still take the 179 deduction. Sect 179 has a carryover element. If I know they will have a profit next year it will get it used then. Otherwise, I take the depreciation and any bonus available.

[OldJack]

If a business owner purchases a new piece of equipment with a credit card ($4,000) and assuming the business has sufficent taxable income, is the business allowed a section 179 deduction for that purchase?

Yes.. the fact that it is considered paid for by credit card is covered in Rev. Proc. 92-71.

[Taxman]

Thanks

I thought that was the case, but it's better to ask and be safe then to be sorry.

[Unregistered]

credit card purchases through a national credit card, as opposed to a store credit card, is considered a purchase/finance purchase. As long as the purchase is placed in service you have an item for 179.

Actually, for capital expenditures how you pay for it is completely disregarded. For current expenses a "true" store card counts only when paid. However, many of the store cards are actually bank cards with the store logo.