Equipment Finance

LEASING ADVANTAGES

Section 179 Tax Credit

What is the Section 179 Deduction?

Many business owners are unaware that the acquisition of equipment under a $1 purchase option lease or
Equipment Finance Agreement (EFA) qualifies for the tax break provided under Section 179 of the Internal Revenue Code. Subject to limitations, Section 179 allows taxpayers to take an outright deduction equal to the full purchase price of qualifying equipment purchased during the tax year, and a $1 purchase option lease or EFA is considered a purchase under the Internal Revenue Code.

The limitations on the deduction for tax years that begin in 2013 include:

a) an aggregate cap on the Section 179 deduction of $500,000

b) a dollar-for-dollar reduction in that cap to the extent that the cost of qualifying equipment placed by the taxpayer during the tax year exceeds $2 million

c) the deduction cannot reduce taxable income below $0

d) other applicable limitations

**Tax calculation is only an example for illustrative purposes. Consult your tax advisor regarding the impacts Section 179 and bonus depreciation may have for your business. Financing based on credit approval.