Assume that the Section 179 deduction limit is $1,000,000 and that businesses exceeding a total of $2,500,000
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Assume that the Section 179 deduction limit is $1,000,000 and that businesses exceeding a total of $2,500,000 in purchases of qualifying personal property will have the Section 179 deduction phase-out dollar-for-dollar. Also assume that the taxpayer has elected out of any bonus depreciation. Please treat each item separately.
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1. Equipment in the amount of $300,000 was purchased and placed in service during the current year. Taxable income before the 179 deduction was $900,000. No other personal or real property was purchased during the year. 2. Land in the amount of $30,000 was purchased and placed in service during the current year. Taxable income before the 179 deduction was $94,000. No other personal or real property was purchased during the year. 3. Equipment in the amount of $10,000 was purchased and placed in service during the current year. Taxable income before the 179 deduction was $4,000. No other personal or real property was purchased during the year. 4. Equipment in the amount of $10,000 was purchased and placed in service during the current year. Net loss before the 179 deduction was $18,000. No other personal or real property was purchased during the year. 5. Equipment in the amount of $1,100,000 was purchased and placed in service during the current year. Taxable income before the 179 deduction was $1,500,000. No other personal or real property was purchased during the year. 6. Equipment in the amount of $2,700,000 was purchased and placed in service during the current year. Taxable income before the 179 deduction was $940,000. No other personal or real property was purchased during the year. 7. Equipment in the amount of $2,700,000 was purchased and placed in service during the current year. Taxable income before the 179 deduction was $750,000. No other personal or real property was purchased during the year. 8. An office building in the amount of $1,000,000 was purchased and placed in service during the current year. A fire alarm system in the amount of $100,000 was purchased and installed in the building later in the year. Taxable income before the 179 deduction was $1,500,000 No other personal or real property was purchased during the year. 9. An apartment building in the amount of $500,000 was purchased and placed in service during the current year. A fire alarm system in the amount of $50,000 was purchased and installed in the building later in the year. Taxable income before the 179 deduction was $300,000. No other personal or real property was purchased during the year. 1. Equipment in the amount of $300,000 was purchased and placed in service during the current year. Taxable income before the 179 deduction was $900,000. No other personal or real property was purchased during the year. 2. Land in the amount of $30,000 was purchased and placed in service during the current year. Taxable income before the 179 deduction was $94,000. No other personal or real property was purchased during the year. 3. Equipment in the amount of $10,000 was purchased and placed in service during the current year. Taxable income before the 179 deduction was $4,000. No other personal or real property was purchased during the year. 4. Equipment in the amount of $10,000 was purchased and placed in service during the current year. Net loss before the 179 deduction was $18,000. No other personal or real property was purchased during the year. 5. Equipment in the amount of $1,100,000 was purchased and placed in service during the current year. Taxable income before the 179 deduction was $1,500,000. No other personal or real property was purchased during the year. 6. Equipment in the amount of $2,700,000 was purchased and placed in service during the current year. Taxable income before the 179 deduction was $940,000. No other personal or real property was purchased during the year. 7. Equipment in the amount of $2,700,000 was purchased and placed in service during the current year. Taxable income before the 179 deduction was $750,000. No other personal or real property was purchased during the year. 8. An office building in the amount of $1,000,000 was purchased and placed in service during the current year. A fire alarm system in the amount of $100,000 was purchased and installed in the building later in the year. Taxable income before the 179 deduction was $1,500,000 No other personal or real property was purchased during the year. 9. An apartment building in the amount of $500,000 was purchased and placed in service during the current year. A fire alarm system in the amount of $50,000 was purchased and installed in the building later in the year. Taxable income before the 179 deduction was $300,000. No other personal or real property was purchased during the year.
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The Section 179 deduction allows businesses to deduct the cost of qualifying personal property purchased and placed in service during the year subject to certain limits and phaseout thresholds Lets an... View the full answer
Related Book For
Federal Taxation 2020 Comprehensive
ISBN: 9780135196274
33rd Edition
Authors: Timothy J. Rupert, Kenneth E. Anderson, David S. Hulse
Posted Date:
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