IRS Revises Section 179 Expensing Amounts to Reflect HIRE Act Changes

On June 1, the IRS issued revised inflation-adjusted numbers to reflect the extension of the increased section 179 expensing amount for 2010 (Revenue Procedure 2010-24).


On March 18, 2010, the Hiring Incentives to Restore Employment Act of 2010, PL 111-147 (the HIRE Act), extended for 2010 the increased amounts that taxpayers can expense under IRC § 179. The HIRE Act extended the $250,000 limitation on the aggregate cost of section 179 property that can be treated as an expense. It also provided that the $250,000 amount is reduced by the amount by which the cost of section 179 property placed in service during 2010 exceeds $800,000.


Originally, the $250,000 and $800,000 amounts were $125,000 and $500,000, respectively (IRC § 179(b)). The Economic Stimulus Act of 2008, PL 110-185, increased the amounts to $250,000 and $800,000 for tax years beginning in 2008 and 2009. The HIRE Act extended those increased amounts for another year.


When the IRS issued its inflation-adjusted numbers for 2010 (Revenue Procedure 2009-50), the section 179 amounts had been scheduled to revert with the expiration of the Economic Stimulus Act changes. Revenue Procedure 2010-24 amends Revenue Procedure 2009-50 to take into account the HIRE Act’s extension of the larger amounts. The change is effective for tax years beginning in 2010.


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