Property Acquired by Purchase

To qualify for the section 179 deduction, your property must have been acquired by purchase. For example, property acquired by gift or inheritance does not qualify.

Property is not considered acquired by purchase in the following situations.

1. It is acquired by one component member of a controlled group from another component member of the same group.

2. Its basis is determined either:

a. In whole or in part by its adjusted basis in the

hands of the person from whom it was acquired, or

b. Under the stepped-up basis rules for property ac quired from a decedent.

3. It is acquired from a related person.

Related persons. Related persons are described under Related persons, earlier. However, to determine whether property qualifies for the section 179 deduction, treat as an individual’s family only their spouse, ancestors, and lineal descendants and substitute "50%" for "10%" each place it appears.

16 Chapter 2 Electing the Section 179 Deduction Publication 946 (2025)

Example. You are a tailor. You bought two industrial sewing machines from your father. You placed both machines in service in the same year you bought them. They do not qualify as section 179 property because you and your father are related persons. You cannot claim a section 179 deduction for the cost of these machines.