Question

Item5 eBook References Check my work Check My Work button is now enabledItem 5 Item 5 Michael is the sole proprietor of a small business. In June 2017, his business income is $12,000 before consideration of any § 179 deduction. He spends $245,000 on furniture and equipment in 2017. If Michael elects to take the § 179 deduction and no bonus on a conference table that cost $25,000 (included in the $245,000 total), determine the maximum cost recovery for 2017 with respect to the conference table:

Answer 1

It can be noted that that §179 would be creating NOL.

So, §179 expense is restricted to $12,000 Only.

So the calculations can be seen as

$25,000 §179                                                $12,000

($12,000)

$13,000 basis x 14.29% 7-year MACRS 1,858

Total Cost Recovery                                    $13,858

So, the total cost recovery is $13,858