 Eligible property what does that mean to qualify for the section 179 deduction your property must be one of the following types of depreciable property number one tangible personal property number two other tangible property except buildings and their structural components used as a an intangible part of manufacturing production or extraction or a furnishing transportation communications electricity gas water or sewage disposal services be a research facility used in connection with any of the activities in a above or see a facility used in connection with any of the activities and a for bulk storage of fungible commodities three single purpose agricultural livestock or horticultural structures see chapter seven a publication 225 for definitions and information regarding the use requirements that apply to these structures number four storage facilities except buildings and their structural components used in connection with distributing petroleum or any primary product of petroleum five off the shelf computer software six qualified section 179 real property described below all right so tangible personal property tangible personal property is any tangible property that is not real property it includes the following property machinery and equipment so that would be you know one of the more common types of examples here right machinery equipment property contained in or attached to a building other than structural components so these areas get a little bit kind of confusing because remember if you have something that's going to be part of the building itself then you have a much longer depreciation period that you have to depreciate a building and generally improvements then other types of things such as equipment for example so then the question is is it possible because remember the general rule is that we would like to take the deduction sooner rather than later therefore if at all possible we would have we would like to have lower lives assigned to the property that's being depreciated so we can get the depreciation sooner and of course if we can accelerate the depreciation with a double declining balance type of situation as opposed to straight line or and or if we could get some kind of lump sum depreciation in period one 179 or special depreciation we would like to do that so you get into these these issues of well now I have a building but I have this thing is it part of the building or can I call it something other than part of the building if I can say it's not actually part of the building but a piece of equipment then maybe I can apply 179 deduction to it maybe I can get a shorter period that I can depreciate it over and so on and so forth so this categorization becomes important when we're trying to maximize the depreciation so again property containing in or attached to a building other than structural components such as refrigerators grocery store containers office equipment printing process says testing equipment and signs gasoline storage tanks and pumps at retail service stations livestock including horses cattle hogs sheep goats and mink and other for bearing animals for bearing animals portable air conditioners or heaters placed in service by you in tax years beginning after 2015 that's one you know they gets a little bit more messy with the heaters and in the air conditioning are they part of the building or they portable and not part of whatever so certain property use a predominantly to furnish lodging or in connection with the furnishing of lodging except as provided in section 50d2 so the treatment of property as tangible personal property for the section 179 deduction is not controlled by its treatment under local law for example property may not be tangible personal property for the deduction even if treated so under local law so sometimes when you when you look at these terminologies basically it goes to the state in terms of what the law is related to them so for example if you if you think about community property states versus non-community property states with regards to marriage and the impact it could have on married filing joint or separate then you've got to go to the state law but when you're talking about other definitions then the the federal government may not obviously allow the state and locality to just change the definition of something which could change how something would be treated in one state or locality to the to another that would be kind of you know cheating or disingenuous right we need the same definitions to to to apply evenly so for example property may not be tangible personal property for the deduction even if treated so under local law and some properties such as fixtures may be tangible personal property for the deduction even if treated as real property under local law off the shelf computer software off the shelf computer software is qualifying property for purposes of the section 179 deduction this is computer software that is readily available for purchase by the general public is subject to non-exclusive license and has not been substantially modified so software becomes an issue because the question is you know did you just buy like the software that could be quite expensive kind of software or is it like research and development something that was created kind of internally and whatnot and then you know is that going to change the treatment of you know how you're going to be accounting for the software so it includes any program designed to cause a computer to perform a desired function however a database or similar items is not considered computer software unless it is in the public domain and is incidental to the operation of otherwise qualifying software