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Methodology and Sources
What is sourced, what is assumed, and how to read the results.
Sourced figures
- 2026 Section 179 maximum ($2,560,000), phase-out threshold ($4,090,000) and heavy SUV cap ($32,000): IRS Rev. Proc. 2025-32, section 4.24, and IRS Publication 946 (2025), "What's New for 2026".
- 2025 Section 179 figures ($2,500,000, $4,000,000, $31,300): IRS Publication 946 (2025).
- Business income limit, carryover, business-use test and qualifying property: IRS Publication 946, chapter 2.
- 100% bonus depreciation for qualified property acquired after January 19, 2025: IRS news release IR-2026-06 (Notice 2026-11).
- Lease versus conditional sales contract: IRS "Income & Expenses 7".
Our assumptions (labeled estimates)
- Loan payments use the standard fixed-rate formula, monthly compounding, payments at the end of each month.
- Lease payments are estimated as a loan with a balloon equal to the residual. Many lessors price differently. If you have a quote, enter it.
- The comparison treats resale value, tax rate and residual as your inputs. There are no market data behind them.
- The comparison assumes the purchase cost and loan interest are fully deducted by the end of the comparison and the resale proceeds are taxed at the same rate. It does not discount future dollars.
- The Section 179 estimate uses the dollar limit, phase-out, SUV cap, business-use test and business income limit only.
Not included
State tax rules, bonus and regular depreciation schedules, passenger automobile limits, alternative minimum tax, property taxes, insurance and any fee you do not enter. Last review October 2026.
- IRS Rev. Proc. 2025-32: 2026 inflation adjustments (section 4.24, Section 179)
- IRS Publication 946 (2025): How To Depreciate Property
- 26 U.S.C. 179: Election to expense certain depreciable business assets
- IRS news release IR-2026-06: 100% additional first year depreciation (Notice 2026-11)
- IRS: Is it a deductible lease payment or a depreciable purchase? (Income & Expenses 7)
- IRS: About Form 4562, Depreciation and Amortization
- IRS Publication 544: Sales and Other Dispositions of Assets