TaxGuru,

What is the maximum one time deduction allowed for 2006 tax return. I think it is referred to as section 179 deduction?

Dear Kapriati,

The maximum one time deduction allowable for 2006 is $108,000 for qualified expenditures! Remember this is deduction is limited to taxable income without consideration of applying the section 179 deduction.

In other words, no deduction is allowed against $0 taxable income, and where taxable income is say for example $50,000, the s179 deduction is reduced to $50,000 despite the taxpayer having qualifed expenses of say $108,000.