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Unformatted text preview: nd timely expense election to deduct the maximum amount under code Sec. 179.
Browne was not a member of any pass through entity. What is Browne's deduction under the election?
Choice "d" is correct. A taxpayer who spends less than $800,000 on equipment in 2008-2010 can deduct
the cost of equipment purchases up to a maximum of $250,000 per tax year. The deduction is limited to
the amount that will reduce taxable income to zero. Because Brown's net income is greater than the
$30,000 allowable deduction, the limitation does not apply.
Choice "a" is incorrect. Under Section 179 of the Internal Revenue Code, a taxpayer may elect to deduct
a limited amount of the cost of property purchased for use in a trade or business. This deductible amount
may be greater than the depreciation otherwise allowable under MACRS.
Choices "b" and "c" are incorrect. $10,000 and $25,000 were the limitations on Section 179 deductions
several years ago.
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.
- Fall '10
- The Land