There is one coherent argument about large capital expenses for pass-through entities (LLC's, S-Corp, Sole Proprietorships). Bob the business owner needs a new

There is one coherent argument about large capital expenses for pass-through entities (LLC's, S-Corp, Sole Proprietorships). Bob the business owner needs a new gizmo for his lawn care operation. It costs $500k. Normally he would need to depreciate this gizmo over some period of time (it depends on what you are buying) spreading the expense out over those years. If he has a net-profit over $250k then whatever he makes over that rate will be taxed at that higher rate reducing his ability to afford the gizmo. Essentially the issue is that under normal accounting rules he would pay the higher tax rate today, but it would take 5 years for him to fully realize that expense from a tax perspective. That could, at least in theory, make small business owners a bit gun-shy about making large capital purchases as their take-home pay would take a hit even though they bought something for the business instead. Thankfully the legislation, as crafted by Obama, contains provisions allowing the cap on capital purchase deductions to be raised significantly (I think it would have put it over $1M). Thus you could take the entire expense in the year you bought the thing and avoid this particular tax issue.