[{"data":1,"prerenderedAt":7},["ShallowReactive",2],{"faq-standard-7382":3},{"rec_id":4,"title":5,"text":6},"7382","What is Section 179 recapture?","\u003Ci>Section 179\u003C/i> recapture happens when an asset has its business use drop to 50% or below (including assets you gave away or converted to personal use). When that happens, you are required to recompute your prior depreciation as if you didn't claim \u003Ci>Section 179\u003C/i> expense. To do so, you need to take the amount of \u003Ci>Section 179\u003C/i> expense and calculate the amount of depreciation that would have been allowed on that amount if you hadn't taken the \u003Ci>Section 179\u003C/i> expense. The difference between the \u003Ci>Section 179\u003C/i> expense and the amount of regular depreciation that you would've claimed on the \u003Ci>Section 179\u003C/i> amount needs to be recaptured.\r\n\u003Cbr>\u003Cbr>\r\n\u003Cb>Example:\u003C/b>\u003Cbr>\r\nTwo years ago, you bought a business asset for $12,000. You took a \u003Ci>Section 179\u003C/i> deduction of $5,000. You used your asset 100% for business in prior years. However, this year your asset dropped to 40% business use. This year you'll need to recapture your \u003Ci>Section 179\u003C/i> expense.\r\n\u003Cbr>\u003Cbr>\r\nAssuming you used double declining accelerated depreciation and your asset was a 5 year asset using the half-year MACRS convention, you'll need to figure the amount that you could have taken each year on your $5,000 of \u003Ci>Section 179\u003C/i> expense if it had been depreciated normally.\r\n\u003Cbr>\u003Cbr>\r\nDepreciation that would have been taken in the year placed in service: 5,000 * (2/5) * .5 = $1,000\r\n\u003Cbr>\u003Cbr>\r\nDepreciation that would have been taken last year: (5,000 - 1,000) * (2/5) = $1,600\r\n\u003Cbr>\u003Cbr>\r\nTotal depreciation that could have been taken on the \u003Ci>Section 179\u003C/i> amount: $1,000 + $1,600 = $2,600.\r\n\u003Cbr>\u003Cbr>\r\nAmount to add to existing prior depreciation: $2,600\u003Cbr>\r\nAmount to recapture: $5,000 - $2,600 = $2,400",1777391485885]