Question

In 2018, Lassy Enterprises spent $48,400 on tangible personalty and elected to expense the full $48,000. Due to the taxable income limitation, only $21,000 of the Section 179 expense can be deducted. Lassy purchased tangible personalty for $990,000 in 2019. Without taking into considersation any Section 179 deduction, Lassy 's taxable income was $1,912,400. What is Lassy's Section 179 deduction for 2019?

Answer 1

In 2018, Lassy Enterprises claimed asection 179 deduction of $21,000 and remaining $22,000 is carried for next year.

In 2019 also the Lassy Enterprises are eligible for Section 179 deduction as the expense is within the limits prescribed for that year i.e,$1,020,000

So total S.179 deduction for 2019 is $990,000 + $22,000 =1,012,000

Assuming that the category assets purchased are meeting the requirements of section 179

Note : Bonus depreciation is not considered

Note 2 : Now, the equipment's net cost will be reduced by the tax savings got by the corporation due to 100% eligible depreciation