Taking Advantage of Section 179 on Purchases of Dental Property

As businesses and tax attorneys specializing in representing dental practices, the dental practice attorneys at Nardone Limited regularly assist our dental clients in the purchase and sale of their dental practices and structuring these transactions for optimal tax planning opportunities for our clients. For more information about tax planning for your business, see our post here.  For dentists expanding their dental practice or purchasing a new dental practice, the ability to depreciate the cost of the purchase is very important. And, due to the time value of money, the faster the depreciation the better. This year I.R.C. § 179 presents a tremendous tax planning opportunity to dentists contemplating expanding their dental practice by permitting a substantial deduction of the purchase price in 2013.

Section 179 Opportunity in 2013

Currently, a purchaser can elect to deduct up to $500,000 of the cost of new or used tangible personal property placed in service by December 31, 2013. See I.R.C. § 179(b)(1)(B). Although the deduction is limited by your dental practice’s taxable income, there is no pro rata reduction of the I.R.C. § 179 expensing deduction depending on the portion of the year the asset is held. Treas. Reg. § 1.179-1(c)(1). This means a dentist can deduct up to $500,000 of equipment purchased and placed in service by December 31, 2013 regardless of when the equipment was purchased. In addition, you may claim first-year bonus depreciation equal to 50{c91082aefe0e580fe546c40af534787b48cfd474f8c9ab8dac50bf49a7a1c43a} of the cost of most new (not used) equipment and software placed in service by December 31 of this year.  Unless Congress extends this legislation, the expense limitation will drop to $25,000 and the 50{c91082aefe0e580fe546c40af534787b48cfd474f8c9ab8dac50bf49a7a1c43a} bonus depreciation will expire in 2014. Thus, if you are contemplating expanding your dental practice by purchasing new equipment or purchasing an existing dental practice, you should talk with your tax professionals soon to ensure you are taking advantage of this year’s tax planning opportunities. 

Contact Nardone Limited

If you have any questions regarding your acquisition of a dental practice or expansion of your current practice, you should contact Nardone Limited. Nardone Limited, a Columbus, Ohio law firm, provides specialized dental practice representation across the state of Ohio. The business attorneys at Nardone Limited specialize in representing dentists in such diverse areas as: (i) dental practice business succession planning, (ii) buy and sell of dental practices, (iii) real estate matters including lease agreements and other commercial real estate transactions relating to dental practices, and (iv) employment matters. We, at Nardone Limited, understand that a dental practice is a business, and we strive to handle transactions to minimize our client’s time spent away from the office. Whether your practice is beginning, transitioning, or encountering adversity, Nardone Limited provides the legal guidance your practice needs. Contact Nardone Limited today to discuss your practice and how Nardone Limited may help you.