What Is 179 Listed Property?

Q: When must the property be purchased and placed in service?

By December 31, 2026 Timing matters. The gear has to be both purchased and put to work by the last day of 2026. If you lease or finance, you still qualify—as long as you’re the owner when it’s placed in service. IRS .

Q: What’s the process for claiming the deduction?

File Form 4562 with your business return First, fill out Form 4562 (Depreciation and Amortization). Drop the Section 179 figure on line 12, then attach the form to your usual business return—Form 1065 for partnerships, 1120 for corporations, etc. IRS .

Q: Are there state-level differences I should know about?

Some states decouple from federal Section 179 rules California, for example, doesn’t always follow the federal playbook. Always check your state’s tax code—what flies in D.C. might not fly in Sacramento. IRS .

Q: What happens if I dispose of the property before the end of its useful life?

You may have to recapture part of the deduction Sell it, trade it, or junk it too soon and the IRS may ask for some of the write-off back. The recapture rule claws back the difference between regular depreciation and what you claimed under Section 179. IRS .

Quick Fix

Need to write off the full cost of qualifying property in the same year you put it to work? Section 179’s your friend. Just make sure the gear’s used at least half the time for business, you bought it by December 31, 2026, and you file IRS Form 4562. The 2026 cap sits at $1,290,000. IRS.

What’s Happening

Section 179 lets businesses deduct the entire cost of qualifying property in the year it goes into service

Right now, Section 179 of the U.S. tax code lets companies deduct the full price of eligible property the same year it’s placed in service—no multi-year depreciation required. For 2026, the maximum write-off is $1,290,000, but that number starts to shrink once you hit $3,330,000 in total qualifying purchases. Only tangible, personal property that’s used more than half the time for business makes the cut. IRS.

What qualifies as 179-listed property?

Generally, it’s tangible personal property used over 50% for business

Think machinery, computers, or HVAC units that run your shop. Vehicles tip the scales only if they weigh 6,000 lbs or more—some trucks and SUVs clear that hurdle. Even off-the-shelf software can qualify. Just steer clear of anything you got as a gift, inherited, or swapped in a trade. IRS.

When must the property be purchased and placed in service?

By December 31, 2026

Timing matters. The gear has to be both purchased and put to work by the last day of 2026. If you lease or finance, you still qualify—as long as you’re the owner when it’s placed in service. IRS.

How do I calculate the Section 179 deduction?

Start with the $1,290,000 2026 limit and subtract any amount over $3,330,000 in total purchases

In 2026, the deduction maxes out at $1,290,000. But once your total qualifying buys for the year exceed $3,330,000, that cap drops dollar-for-dollar. Whatever you claim can’t push your taxable business income below zero, either. IRS.

What’s the process for claiming the deduction?

File Form 4562 with your business return

First, fill out Form 4562 (Depreciation and Amortization). Drop the Section 179 figure on line 12, then attach the form to your usual business return—Form 1065 for partnerships, 1120 for corporations, etc. IRS.

What if my deduction exceeds my taxable income?

You can’t create or increase a net operating loss with Section 179

If the write-off would wipe out all your taxable income, Section 179 won’t let you go negative. Instead, look at bonus depreciation or regular depreciation to soak up the rest. IRS.

How does bonus depreciation compare to Section 179?

Bonus depreciation lets you deduct a portion of new or used property cost in the first year

For 2026, bonus depreciation sits at 60% of the qualified cost—down from 100% in earlier years. Unlike Section 179, it applies to both new and used property, so it can cover leftover amounts after you hit the Section 179 limit. IRS.

Can I use Section 179 on used property?

Yes, as long as it meets the usual business-use and timing rules

Used property is fair game if it’s tangible, personal, and used more than half the time for business. Just confirm the purchase date is on or before December 31, 2026. IRS.

What’s the difference between listed property and other Section 179 property?

Listed property includes vehicles and certain high-tech gear that face stricter tracking rules

Think cars, planes, or property like phones and tablets that can easily slip into personal use. The IRS keeps a tighter leash on these assets, so you’ll need solid documentation showing the business-use percentage stays above 50%. Regular machinery or computers don’t face the same scrutiny. IRS.

How do I prove business use for listed property?

Maintain mileage logs for vehicles and usage logs for other listed items

Keep a mileage log for any car, truck, or SUV you claim. For computers, phones, or tablets, track power-on hours or specific business tasks. Receipts alone aren’t enough—you need a clear, contemporaneous record. IRS.

Are there state-level differences I should know about?

Some states decouple from federal Section 179 rules

California, for example, doesn’t always follow the federal playbook. Always check your state’s tax code—what flies in D.C. might not fly in Sacramento. IRS.

What records should I keep to stay audit-proof?

Save purchase invoices, proof of placement in service, and detailed usage logs

Hang onto the bill of sale, delivery receipt, or installation paperwork. For listed property, keep mileage logs, calendar entries, or software usage reports. The more contemporaneous the records, the better. IRS.

Can I take Section 179 on real estate?

No, Section 179 doesn’t cover buildings or structural components

Section 179 is strictly for tangible personal property—think equipment, vehicles, and software. Land, buildings, and permanent fixtures don’t qualify. You’ll need cost segregation or other depreciation methods for those. IRS.

What happens if I dispose of the property before the end of its useful life?

You may have to recapture part of the deduction

Sell it, trade it, or junk it too soon and the IRS may ask for some of the write-off back. The recapture rule claws back the difference between regular depreciation and what you claimed under Section 179. IRS.

Where can I find the latest IRS updates on Section 179?

Check the IRS Section 179 deduction page

Inflation adjustments and other tweaks pop up regularly. The IRS keeps the official scoreboard at IRS Section 179. Bookmark it and revisit before you file. IRS.

Note: The $1,290,000 limit and $3,330,000 phase-out are indexed for inflation as of 2026. Always confirm current thresholds with the IRS.