Just by the way you're phrasing it, the assertion is ridiculous. Some of those exceptions are huge, especially if you're running a small business and encounter one of these so-called few exceptions.
Most small businesses won't be running into those exceptions frequently. Think about it...how many small businesses rent, not own, office space? Thus, when the air conditioner goes out, it's not their expense. Because they don't buy their offices, they don't have a real property expense very often, if ever. How many
small businesses started in the United States are going to have personal or real property located in another country?
The whole topic of this discussion was the "little guy" that gets misclassified as as the "rich guy." A small business, as defined by the SBA for their reports, has under 500 employees and less than $10 million in gross income. In 2004, there were 26.8 million returns for these businesses classified as "small businesses." 58% of those business
grossed $25,000 or less; 88% of them had no more than $250,000
gross.
What's with all the numbers? To show that most small businesses aren't making a whole lot, and thus they normally don't have the ability to make these rather large expenditures that are not allowed as an immediately deductible expense. 58% of small businesses aren't going out there and buying real property with $25,000 in gross profits. They're not buying plane tickets to foreign countries, much less buying and using personal or real property in foreign countries. It's unlikely that most of the 30% who are making between $25,000 and $250,000 in gross profits are making large expenditures like these either.
Our business is a prime example of that. All of our expenses were deductible, and it's been that way for three years now. As much as I'd love to throw down $300,000 in one lump sum payment in one year on land and an office building, we just can't do it, and neither can most other small businesses. If you have the ability to make such huge expenses that have to be amortized, then maybe you shouldn't consider yourself the "little guy" that's getting misclassified, because you're well above 88% of other "small businesses."
Now, if we're just talking about all businesses regardless of size and gross profits, then sure, many businesses have capital expenses that are large as hell, but they are not able to be deducted in one year. As a result, the "fake number" produced on the income statement doesn't include the entirety of all ordinary and necessary business expenses.
But, if you're going to point out the flaws of this "fake number" that negatively affects your thriving business, then at least recognize the positive effects as well. Although you can't claim the entirety of your $300,000 real property expense in one year, you will be able to do so in subsequent years until that entire $300,000 has been deducted. Thus, for subsequent years when you actually had no real property expenses, you'll be deducting that expense from your income. That type of situation makes it possible for your "fake number" to actually reflect a lower amount of taxable income than what you really netted.
You don't need to explain everything about Section 179. Just keep from making incorrect statements.
Like I said, I acknowledged the exceptions. There was not a generalized statement that all capital expenses under $500,000 were immediately deductible; there was a disclaimer to recognize the exceptions to the general rule. I merely rambled off items that would be considered capital expenses, and then noted the general $500,000 deduction allowed for capital expenses, with an additional indication that exceptions do apply. Misleading? Yeah, sure, I can see that it could be. Incorrect? Not so much.