Question

1. What is the maximum amount of §179 expense Sivart may deduct for 2020?

Assume that Sivart Corporation has 2020 taxable income of $1,750,000 for purposes of computing the $179 expense and acquired several assets during the year. Assume the delivery truck does not qualify for bonus depreciation. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Placed in Service June 12 February 10 Basis $1,440,000 70,000 Asset Machinery Computer equipment Delivery Truck- used Furniture Total 93,000 August 21 April 2 310,000 $1,913,000 a. What is the maximum amount of $179 expense Sivart may deduct for 2020?

Answer 1

Solution:

Section 179 expense for 2020

$               1,040,000

Explanation:

a	Total of Qualified Assets under Section 179	$               1,913,000
b	Threshold for section 179 in 2020	$               2,590,000
c	Maximum Section 179 expense phase out [a-b][Only if value of qualified asset is more than threshold limit]	$                               -
d	Section 179 Maximum 2020 limit	$               1,040,000
e	Section 179 deduction for 2020 is [d-c]	$               1,040,000