Section 179 allows taxpayers to write-off the cost of qualified property that is placed in service. To qualify for the section 179 deduction, your property must meet all the following requirements.
1. It must be eligible property, that is the property must be a qualified property.
2. It must be acquired for business use and used in that trade or business.
3. It must have been acquired by purchase( it must be new)
4.This deduction cannot result in net operating losses for the taxpayer. That is, the section 179 deduction cannot result in a net operating loss for the taxpayer.
The good news here is that the IRS has increased the depreciation allowance from $108,000 in 2006 to $125,000 for 2007.
The Investment limitation has also been increased from $430,000 in 2006 to $500,000 for 2007.
A detailed discussion on Section 179 qualified property and specific discussion on qualified property can be found by clicking the IRS link below. Publication 946 (2006), How To Depreciate Property