Instead of recovering the cost of the property by taking depreciation deductions, Internal Revenue Code 179 allows you to recover all or part of the cost of qualifying property, up to a limit, by deducting it in the year you place it in service.
First of all - what is qualified property? Qualified property is new tangible personal property you use in your arts and crafts business that has a MACRS class life under 20 years. Some examples of qualifying property you'll have in your arts and crafts business are cars, office furniture and fixturing, computer equipment and any specialized arts and crafts tools.
Your tools vary based on your area of arts and crafts. However, they could include sewing machines, knitting machines, woodworking equipment, looms and flexshafts.
There is a dollar limit that occasionally changes from year-to-year. For 2012, the limit is set at $125,000 for expensing any equipment purchases under $500,000 for the year. For more information on depreciation and IRC 179 see Internal Revenue Services Publication 946.
