What types of property can be expensed using the Section 179 deduction?

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The Section 179 deduction allows businesses to expense certain types of property to encourage investment in equipment and machinery. The primary focus of this deduction is on tangible personal property, which includes new or used equipment such as machinery, vehicles, and furniture. This provision enables businesses to deduct the full purchase price of qualifying assets from their gross income in the year the asset is placed in service, rather than depreciating it over several years.

While intangible assets do exist, they are not eligible for Section 179 expensing. Additionally, the deduction does not apply to real estate properties, such as buildings or land. Although new equipment is certainly eligible, Section 179 also encompasses used equipment, making it more flexible and beneficial for businesses looking to optimize their expenses associated with tangible personal property. This emphasis on tangible personal property, rather than exclusively new or intangible or real estate, is the reason why the understanding provided aligns with option B.

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