Would the total purchase price of a rental property I purchase for 500k be a tax deduction through the section 179 tax code if I buy that property to rent out and produce income as my business?
Thank you for your question. We try not to give out specific tax advice because individual circumstances vary. That said, Section 179 is typically only for certain types of personal property used in business like equipment, software, or office furniture. It is possible to use a special election to deduct real property under Section 179, but there are strict criteria for what is allowed. For example, in order to qualify for a Section 179 deduction, a property can’t be one that you purchased just because of the income you will derive (this includes fix-and-flips and buy-and-hold rentals, among other properties).
This means that Section 179 probably would not work in the situation you describe above. However, you may still want to check with a licensed accountant to see how you might use Section 179 for your business. Section 179 is definitely an interesting part of the tax code and one worth exploring further. For more information on the kinds of deductions, you might claim under Section 179, check out our ultimate guide to Section 179 Deductions for Property, Equipment, and Vehicles: https://fitsmallbusiness.com/section-179-deduction/
Hope this helps. Best of luck with your real estate ventures.
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