Question

Assume that TDW Corporation (calendar year end) has 2019 taxable income of $650,000 before the §179...

Assume that TDW Corporation (calendar year end) has 2019 taxable income of $650,000 before the §179 expense, acquired the following assets during 2019:

Asset

Placed in Service

Basis

Machinery

October 12

$2,260,000

Computer Equipment

February 10

263,000

Furniture

April 2

880,000

Total

$3,403,000

What is the maximum amount of §179 expense TDW may deduct for 2019?

The answer 650000 is incorrect

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Answer #1

Solution

Maximum amount of S179 expense TDW may deduct for 2019
Property placed in service (a) $3,403,000
Thershold for S179 phase out (b) $2,550,000 (threshold limit for 2019)
Phase out maximum $179 expense (a-b) $853,000 (Permanently disallowed)
Maximum 179 expense before phase out (d) $1,020,000 (threshold limit for 2019)
Phase out maximum $179 expense (e) $853,000
Maximum 179 expense after phase out (d - e) $167,000
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