Question

During 2019, Alice, Inc. placed in service $3,080,000 of Code section 179 property. How much can Alice, Inc. elect to immediately expense under Sec. 179 in 2019?

a.) $3,080,000

b.) $2,550,000

c.) $530,000

d.) $490,000

Answer 1

d) $490,000

As per sec. 179 maximum deduction for the property, placed in service during 2019, is $1,020,000 but dollar to dollar phaseout is apply to purchases over $2,550,000. Therefore phaseout is ( $3,080,000 - $2,550,000).

Hence,
immediately expense under Sec. 179 = $1,020,000 -   ( $3,080,000 - $2,550,000)
                                                                      = $1,020,000 - $530,000
                                                                      = $490,000

However if Alice income is more than $490,000. then she can take bonus depreciation also.