Is it possible to expense the full cost of new cabinets in the first year under Section 179?
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To determine whether you can expense the full cost of new cabinets in the first year under Section 179, you must analyze several key requirements and limitations under the Internal Revenue Code, Treasury Regulations, and IRS guidance.
1. Is the Property Eligible for Section 179 Expensing?
Section 179 property includes:- Tangible personal property to which section 168 applies,- Certain computer software,- Qualified improvement property (QIP) as defined in section 168(e)(6),- Certain improvements to nonresidential real property (roofs, HVAC, fire protection, security systems).
Section 179 property does NOT include:- Land and land improvements (such as swimming pools, paved parking areas, fences, etc.),- Buildings and their structural components,- Property used mainly outside the United States,- Property used by tax-exempt organizations or governmental units (with limited exceptions),- Property acquired by gift or inheritance.
Cabinets are generally considered part of the building’s structural components if they are permanently installed (e.g., kitchen or bathroom cabinets in a building). According to IRS guidance, structural components of a building (including walls, floors, ceilings, permanent cabinetry, etc.) are not eligible for Section 179 expensing unless they qualify as "qualified improvement property" (QIP) or as a specific improvement to nonresidential real property listed in section 179(e).
2. Do Cabinets Qualify as Qualified Improvement Property (QIP)?
Qualified Improvement Property (QIP) is defined as any improvement to an interior portion of a building that is nonresidential real property, placed in service after the building was first placed in service, and not attributable to:- The enlargement of the building,- Any elevator or escalator,- The internal structural framework of the building.
If the cabinets are part of an interior improvement to nonresidential real property (e.g., an office building, retail store), and are not part of the building’s original construction, they may be considered QIP. In that case, they would be eligible for Section 179 expensing as "qualified section 179 real property".
However, if the cabinets are installed in residential rental property, they do not qualify as QIP and are not eligible for Section 179 expensing.
3. Are the Cabinets Tangible Personal Property?
If the cabinets are not permanently affixed and are instead movable (e.g., display cabinets, shelving units not attached to the building), they may be considered tangible personal property. In that case, they would be eligible for Section 179 expensing, provided all other requirements are met.
4. Section 179 Dollar Limits and Business Income Limitation
For 2025, the maximum Section 179 deduction is $2,500,000, reduced dollar-for-dollar by the amount by which the cost of Section 179 property placed in service exceeds $4,000,000. The deduction is also limited to the amount of taxable income from the active conduct of a trade or business.
5. Recapture and Other Considerations
If the business use of the property drops to 50% or less during the recovery period, a recapture of the Section 179 deduction is required.
6. Summary Table
7. Conclusion
It is possible to expense the full cost of new cabinets in the first year under Section 179 only if:- The cabinets are either (a) tangible personal property (not permanently affixed), or (b) part of a qualified improvement to nonresidential real property (QIP) as defined in section 168(e)(6), and- All other Section 179 requirements and limitations are met (including the dollar and business income limits).
If the cabinets are permanently installed as part of a building’s structural components in residential rental property, they are not eligible for Section 179 expensing.
Careful analysis of the facts—specifically, the type of property, the nature of the installation, and the use of the property—is required to determine eligibility.
If you can provide more details about the property type (residential vs. nonresidential), the nature of the cabinets (permanent vs. movable), and the use, I can give a more specific answer.
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