Section 179 Recapture discount hotels in PortoSection 179 recapture occurs when you are required to add back toincome the section 179 deduction you took in an earlier year. When To Recapturethe Deduction You may have to recapture the section 179 deduction if, in any yearduring the property's recovery period, the percentage of business usedrops to 50% or less or you sell or otherwise dispose of the property.Recovery periods are discussed later. Dispositions of property.You may have to treat any gain you realize from the sale, exchange,or other disposition of business property as ordinary income up to thedepreciation allowed or allowable on the property. The section 179deduction is treated as depreciation for purposes of the recapturerule. See Depreciation Recapture in chapter 11. How To Figure the Recapture Luxus-Hotels ChaniaTo figure the amount to recapture (include in income) take thefollowing steps. Figure the depreciation that would have been allowable onthe section 179 deduction you claimed. Begin with the year theproperty was placed in service and include the year ofrecapture. Subtract the depreciation figured in (1) from the section179 deduction you claimed. The result in (2) is the amount you must recapture. Example.Paul Lamb, a calendar year taxpayer, bought and placed in serviceon August 1, 1997, an item of 3-year property costing $10,000. Theproperty is not listed property. He elected a $5,000 section 179deduction for the property. He used the property only for business in1997 and 1998. During 1999, he used the property 40% for business and60% for personal use. He figures his recapture amount as follows. Section 179 deduction claimed (1997) $5,000 hotel a StoccolmaAllowable depreciation(instead of section 179): 1997 --$5,000 25.00%* $1,250 1998 --$5,000 37.50%* 1,875 1999 --$5,000 25.00%* 40% (business)          500      3,625 1999 --Recapture amount $1,375 *Rates from the 150% table, later. Paul must include $1,375 in income for 1999. Where To Report Recapture Report any recapture of the section 179 deduction on Form 4797 andSchedule F (Form 1040).