Potential Year-end Section 179 Deduction Trap for Fiscal Year Pass-Through Entities

Fiscal Year Pass-Through Entities have the potential to waste their 2013 Section 179 deduction.  A pass- through entity that has a fiscal year beginning in 2013 is eligible to take Section 179 up to $500,000.  However, since the limit for tax years beginning in 2014 is scheduled to be as low as $25,000, the pass-through entity owner, who would report the deduction on his 2014 return, would be limited to the lower amount and the deduction would not be eligible for carryover.  It’s possible that Congress may increase the Section 179 deduction limit for tax years beginning in 2014, however, there’s no guarantee that it will as high as the 2013 limit.