Any Accountants in the House?

Section 179 deduction question

[Conard]

I could make some calls but since I'm here I thought I would ask.

In the US we have a deduction labeled section 179 that will let you deduct the total cost of most equipment and some vehicles on a one shot deal. This eliminates the depreciation over time and if the purchase is large it can knock the income tax burden way down, but for one year only.

The question:
If I make such a purchase and take the deduction what are the penalties of selling that purchase a couple years down the road?
Is there an easy formula used to figure this out?

[paybacksa]

If you sell it for money you need to go back and revert it to a depreciated asset that got sold. If you sell it for money beyond it's normal accounting lifespan, you still are supposed to go back and correct your deduction. If it's a car or other thing that has specific accounting rules, they come into play.

Practically, it's another matter. Assets get rolled into new entities, palleted in liquidation sales, etc.. all the time. Consult your accountant.

[Conard]

Thanks for the reply.
I'm talking about a new truck that I may not keep past 5 years and it looks like I will have to pay back some of the depreciation.