USA Depreciation and net income


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Is depreciation expense limited to the net income?

For example, IF:

Revenues: $100,000
Expenses (including depreciation expense of $12,000): $105,000
Net income / loss: -$5,000

Is that "ok?"

Under section 179, total deductions for qualified expenses cannot exceed net income, correct? So, one might consider using depreciation instead of accelerated expense (Sec. 179) for something like a vehicle purchase if their net income does not exceed the total sec. 179 deduction??

Thanks!
 
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The Finance Writer

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A business can use Section 179 and depreciation for the same asset. You are correct that Section 179 cannot be used to create a business loss. Depreciation is not subject to that limitation.
 

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