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Section 179 (or bonus depreciation) and Personal Equipment with Capital Contribution

Forum|Forum|3 years ago
December 15, 2022
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I acquire a LLC in 2022 as the single member and contributed some computer servers and equipment such as NAS and UPS that I purchased (before I acquired the company) as the company's capital. I wonder if I can use Section 179 or bonus depreciation to deduct them in 2022. These assets are 100% for company's use. Thanks.

Not A Product Question

Best answer by Anonymous_

The original use has to begin with you (your company), but Section 179 has income limitations whereas bonus depreciation does not.

See https://www.irs.gov/newsroom/irs-issues-guidance-on-section-179-expenses-and-section-168g-depreciation-under-tax-cuts-and-jobs-act

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Anonymous_Answer

The original use has to begin with you (your company), but Section 179 has income limitations whereas bonus depreciation does not.

See https://www.irs.gov/newsroom/irs-issues-guidance-on-section-179-expenses-and-section-168g-depreciation-under-tax-cuts-and-jobs-act

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ndc24075Author

@Anonymous_ Would you mind explaining more what does "the original use has to begin with you (your company)" mean? My case is that I bought them directly from Dell or Amazon in my name before I acquired the LLC. The computers and equipment are for my own research and developing purposes, which is also how they are used by the company now. Does my case qualify if the income limitations are not an issue?