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Sec 179/Real Property - Questioning Update Seminar

January 25, 2017 • Allen Freiman • Log In to Post Comments

Please refer to page 4-8 in the update seminar manual.  It is clear that Sec 179 is allowed for Qualified Leasehold Improvement Property and your example in the middle of that page suggests the same.  My question is this - you must still have trade or business taxable income in order to deduct Sec 179 currently.  In your example you are suggesting that a landlord's commercial rental activity is a trade or business.  Is that correct?  If an accounting firm rents space and makes their own qualified leasehold improvements, I believe the firm can take section 179 because they might clearly have trade or business income - BUT if a landlord of a commercial property makes the leasehold improvements for their tenant - again are you saying the landlord's income is trade or business income for section 179 puposes?


Thank you.


~~I agree with you. The trade or business requirement is imposed twice under §179: first as a general requirement under §179(b)(3) and second as a specific requirement for qualified real estate under §179(f)(1)(B). I agree that the example should have specified that “Landlord” was in the real estate trade or business.


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