What is the amount of section 179 expense deduction that can be included in COGS?
A Section 179 expense deduction is only allowed for taxable entities that elect to use COGS to compute their margin. Only taxable entities that sell real or tangible personal property in the ordinary course of business are eligible to use COGS. Allowable costs include depreciation and Section 179 expense deductions that are related specifically to equipment used in the production of goods. The limit for the Section 179 expense that can be included in COGS for the 2008 franchise tax report is $108,000. Based on the definition of IRC in TTC 171.0001(9) we are tied to the IRC in effect for the federal tax year beginning on January 1, 2007, not including any changes made by federal law after that date. The increase to the Section 179 amount to $125,000 by the Small Business & Work Opportunity Act of 2007, signed May 25, 2007, is not applicable for franchise tax reporting purposes.
A Section 179 expense deduction is only allowed for taxable entities that elect to use COGS to compute their margin. Only taxable entities that sell real or tangible personal property in the ordinary course of business are eligible to use COGS. Allowable costs include depreciation and Section 179 expense deductions that are related specifically to equipment used in the production of goods. The limit for the Section 179 expense that can be included in COGS for the 2008 franchise tax report is $112,000. The limit for the Section 179 expense that can be included in COGS for the 2009 franchise tax report is $115,000. Based on the definition of IRC in TTC 171.0001(9) we are tied to the IRC in effect for the federal tax year beginning on January 1, 2007, not including any changes made by federal law after that date. The increase to the Section 179 amount to $125,000 by the Small Business & Work Opportunity Act of 2007, signed May 25, 2007, is not applicable for franchise tax reporting purpos
