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19. During 2018, Teodoro purchases $425,000 of manufacturing equipment (7-year property) for use in his business....

19. During 2018, Teodoro purchases $425,000 of manufacturing equipment (7-year property) for use in his business. Teodoro has taxable income from his business of $150,000. What is the maximum amount that Teodoro may deduct under the election to expense depreciation without considering Bonus and MACRS? (rounded to the nearest dollar)
a. $60,733
b. $500,000
c. $425,000
d. $150,000
e. None of the above. The answer is _________
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Answer #1

Answer:

The maximum amount deductible under the election to expenses cannot be more than the property’s cost and subject to the taxable income limit.

Equipment Cost = $425,000

Taxable Income of Travis = $150,000

Hence, maximum amount to deduct under election to expense = $150,000.

(D).

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