Electing the Deduction

The section 179 deduction is not automatic. If you want to take the deduction, you must elect to do so. See How To Make the Election, later.

Placed-in-Service Rule

For purposes of the section 179 deduction, you place property in service in the year it is first made ready and available for a specific use. This use can be in a trade or business, the production of income, a tax-exempt activity, or a personal activity. If you place property in service in a use that does not qualify it for the section 179 deduction, it cannot later qualify in another year, even if you change it to business use.

Example. Last year, you bought a new car and used it for personal purposes. This year, you began using it for business. Changing the car's use to business use does not qualify its cost for a section 179 deduction. However, you can claim a depreciation deduction for the business use of the car this year. To figure the depreciation deduction, see chapter 3.

How To Make the Election

You make the election by taking your deduction on Form 4562. You attach and file Form 4562 with either of the following.

• Your original tax return filed for the year the property was placed in service (whether or not you file it timely).
• An amended return filed by the due date (including extensions) for your return for the year the property was placed in service. In other words, you cannot make an election for the section 179 deduction on an amended return filed after the due date (including extensions).

If you timely filed your return for the year without making the election, you can still make the election by filing an amended return within six months of the due date of the return (excluding extensions). For more information, see the instructions for Part I of Form 4562.

Revoking an Election

Once you elect a section 179 deduction, you cannot change your selection of 179 property or revoke your election without IRS approval. The IRS will grant approval only in extraordinary circumstances. A request to change or revoke the election is subject to a user fee.

You must file your request with the:
Commissioner of Internal Revenue
Washington, DC 20224

When you file your request you must include the following information.

• Your name.
• Your address.
• Your taxpayer identification number (TIN).
• A statement showing the year and property involved and your reasons, in detail, for the request.

The request must be signed by you or your representative.

Recordkeeping Requirements

You must keep records that show the specific identification of each piece of qualifying section 179 property. These records must show how you acquired the property, the person you acquired it from, and when you placed it in service.

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