- 10 - sustains respondent's determination that no deduction is allowed under section 174(a). Petitioners contend, alternatively, that the $7,000 cost of the Porsche engine is deductible under section 179. Under section 179, a taxpayer may elect to treat the cost of any section 179 property as a current expense in the year such property is placed in service. Sec. 179(a). The aggregate cost that a taxpayer may deduct under section 179, for the year 1991, may not exceed $10,000.3 Section 179(c)(1) provides that an election must: (A) specify the items of section 179 property to which the election applies and the portion of the cost of each of such items which is to be taken into account under subsection (a), and (B) be made on the taxpayer's return of the tax imposed by this chapter for the taxable year. Petitioners made no election on their income tax return for 1991 to expense the $7,000 under section 179 for the Porsche 928 S4 engine. They are precluded from making that election at this time. Starr v. Commissioner, T.C. Memo. 1995-190, affd. without published opinion 94 F.3d 1146 (9th Cir. 1996). Petitioners next argue that, if the subject engine's cost cannot be expensed under either sections 174 or 179, the cost 3 The dollar limitation has been increased for subsequent years.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011