Question

If a business purchases $3,220,000 in equipment during 2023, its maximum Section 179 deduction is:

A) $1,050,000
B) $2,620,000
C) $3,220,000
D) $500,000

Answer 1

The maximum Section 179 deduction for a business that purchases $3,220,000 in equipment during 2023 is $1,050,000.

Step-by-step explanation:

The maximum Section 179 deduction for a business that purchases $3,220,000 in equipment during 2023 is $1,050,000, which is option A.

Section 179 is a tax code that allows businesses to deduct the full purchase price of qualifying equipment and software in the year it is placed in service, rather than depreciating it over time. However, there are certain limitations on the maximum deduction amount.

For 2023, the maximum Section 179 deduction is $1,050,000. This means that if a business purchases $3,220,000 in equipment, they can deduct up to $1,050,000 from their taxable income.