Final answer:
The statement about the order of limitations to the § 179 expense deduction is false. The correct order is: business income limitation, ceiling amount, and then property placed in service maximum.
Step-by-step explanation:
The answer to the student's question about the limitations to the § 179 expense deduction is false. The limitations are indeed applied in a specific order, but the correct order is: first, the business income limitation, then the ceiling amount, and finally, the property placed in service maximum. It's important to calculate the business income limitation first because the deduction cannot exceed the taxable income from active conduct of any trade or business during the year. Next, the ceiling amount is considered, which is a dollar limit on the maximum deduction. Lastly, there is the limit on the cost of property placed in service during the tax year.
When claiming the § 179 expense deduction, there are limitations that are applied in a specific order. First, there is a ceiling amount, which is the maximum value of the deduction in a given tax year. Second, there is a property placed in service maximum, which limits the deduction based on the cost of the property being deducted. Lastly, there is a business income limitation, which restricts the deduction based on the amount of business income earned.