for 2007, the limit is 112K. The deduction cannot create a net operating loss, but can be carried ahead. The property must be tangible, depreciable, personal property (1245 property) used in a trade or business, but NOT for the production of income.(rental real estate) It must be placed in service in the year the deduction is taken. If the property ceases to become business property, the deduction will be recaptured. The anual limit on qualifying expenditures is 450k. As far as profit, the 179 deduction is not "phased out." It acts like depreciation for recapture purposes upon disposition and is recaptured as ordinary income. You can split the 179 up any way you want.