Publication 946 - Introductory Material


Future Developments

For the latest information about developments related to Publication 946 such as legislation enacted after this publication was published, go to www.irs.gov/pub946.

What's New

Increased section 179 deduction dollar limits. The maximum amount you can elect to deduct for most section 179 property you placed in service in tax years beginning in 2014 is $500,000 ($535,000 for qualified enterprise zone property). This limit is reduced by the amount by which the cost of the property placed in service during the tax year exceeds $2,000,000. See Dollar Limits in chapter 2.

The increased section 179 expense deduction limit and threshold amount before reduction in limitation will not apply to property placed in service in tax years beginning after 2014. Also, the definition of section 179 property will not include off-the-shelf computer software and certain qualified real property placed in service in tax years beginning after 2014. See Eligible Property in chapter 2.

Special depreciation allowance for qualified second generation biofuel plant property and certain property placed in service after December 31, 2007. . The special depreciation allowance will not apply to qualified second generation biofuel plant property placed in service in service in tax years beginning after 2014. Also, the special depreciation allowance will not apply to certain property acquired after December 31, 2007, and placed in service in tax years beginning after 2014. See Qualified Second Generation Biofuel Plant Property and Certain Qualified Property Acquired After December 31, 2007 in chapter 3.

Election to accelerate minimum tax credits for round 4 extension property. . For tax years ending after December 31, 2013, a corporation can elect to claim pre-2006 unused minimum tax credits in lieu of the special depreciation allowance for round 4 extension property. See Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance in chapter 3.

Depreciation limits on business vehicles. The total section 179 deduction and depreciation you can deduct for a passenger automobile (that is not a truck or van) you use in your business and first placed in service in 2014 is $3,160, if the special depreciation allowance does not apply. The maximum deduction you can take for a truck or van you use in your business and first placed in service in 2014 is $3,460, if the special depreciation allowance does not apply. See Maximum Depreciation Deduction in chapter 5.

Certain race horses. The 3-year recovery period for race horses two years old or younger will not apply to horses placed in service after December 31, 2014.

Qualified motor sports entertainment complexes. Qualified motor sports entertainment complex property placed in service after December 31, 2014, will not be treated as 7-year property under MACRS.

Qualified leasehold improvement, restaurant, and retail improvement properties. Qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property placed in service after December 31, 2014, will not be treated as 15-year property under MACRS.

Accelerated depreciation for qualified Indian reservation property. The accelerated depreciation of property on an Indian reservation will not apply to property placed in service after December 31, 2014.

Reminders

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

Introduction

This publication explains how you can recover the cost of business or income-producing property through deductions for depreciation (for example, the special depreciation allowance and deductions under the Modified Accelerated Cost Recovery System (MACRS)). It also explains how you can elect to take a section 179 deduction, instead of depreciation deductions, for certain property, and the additional rules for listed property.

The depreciation methods discussed in this publication generally do not apply to property placed in service before 1987. For more information, see Publication 534, Depreciating Property Placed in Service Before 1987.

Definitions.   Many of the terms used in this publication are defined in the Glossary near the end of the publication. Glossary terms used in each discussion under the major headings are listed before the beginning of each discussion throughout the publication.

Do you need a different publication?   The following table shows where you can get more detailed information when depreciating certain types of property.
For information 
on depreciating:
See Publication:
A car 463, Travel, Entertainment, Gift, and Car Expenses
Residential rental property 527, Residential Rental Property (Including Rental of Vacation Home)
Office space in your home 587, Business Use of Your Home (Including Use by Daycare Providers)
Farm property 225, Farmer's Tax Guide

Comments and suggestions.   We welcome your comments about this publication and your suggestions for future editions.

  You can send us comments from www.irs.gov/formspubs. Click on “More Information” and then on “Give us feedback. ” Or you can write to:

Internal Revenue Service 
Tax Forms and Publications 
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Washington, DC 20224

  We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.

  Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products.

Ordering forms and publications.   Visit http://www.irs.gov/Forms-&-Pubs/Order-Products www.irs.gov/formspubs/ to download forms and publications. Otherwise, you can go to www.irs.gov/orderforms to order forms or call 1-800-829-3676 to order current and prior-year forms and instructions. Your order should arrive within 10 business days.

Tax questions.   If you have a tax question, check the information available on IRS.gov or call 1-800-829-1040. We cannot answer tax questions sent to the above address.


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