Question

A business's deductible Sec. 179 expense is limited to the taxpayer's (1) (2) before deducting the Sec. 179 expense. The business can (3) (4) any amount that cannot be deducted in the current year.

a. Net income; After-tax; Carry forward
b. Taxable income; Gross profit; Carry over
c. Taxable income; Before-tax; Carry forward
d. Net profit; After-tax; Carry over

Answer 1

The business's deductible Sec. 179 expense is limited to the taxpayer's taxable income before deducting the expense. Any amount that cannot be deducted can be carried forward to future years.The correct ir is option C.

Step-by-step explanation:

The correct answer is c. Taxable income; Before-tax; Carry forward.

The deductible Sec. 179 expense of a business is limited to the taxpayer's taxable income before deducting the Sec. 179 expense. The business can carry forward any amount that cannot be deducted in the current year.

For example, if a business has a taxable income of $100,000 and a deductible Sec. 179 expense of $150,000, the deductible amount would be limited to $100,000. The remaining $50,000 can be carried forward to future years and deducted in those years.The correct answer is option C.